Effective Mediation of Employment Law Cases

Effective Mediation OF Employment Law Cases

by

M. Ann Anderson
DRC Superior Court Certified Mediator
P.O. Box 93
Pilot Mountain, NC 27041

336-368-9621

annanderson681@hotmail.com
WWW.ANNANDERSONMEDIATOR.COM
I.  INTRODUCTION
 
 Mediation is becoming widely accepted in all types of civil matters and is an extremely helpful process when there is a dispute in the employment law setting.  Mediation gives the parties an opportunity to explore creative options in resolving their disputes and also provides a forum for each side to express directly to each other their concerns about the employment relationship.  When representing a party at mediation, the attorney should be aware that good litigation tactics may not necessarily lead to a successful mediation.  Attorneys should hone their conciliation skills and concentrate on methods that may help their clients reach a resolution of the case, rather than focusing on the skills that might persuade a jury or a judge. 
  Among those issues attorneys should consider about any mediation, and about employment mediations in particular, are when should the mediation be held, what are the client’s expectations, how the case should be presented to the opposing party, who should participate in the mediation, what communications should be made with the mediator and what specific settlement terms should be presented.  Careful thought about these items can help the parties reach an acceptable agreement.

II. TIMING

 Attorneys representing parties in employment law cases should give careful thought to the timing of mediation and to the mediation process.  The decision
about when to mediate can make a difference in how prepared the parties are to come to the table to negotiate and in the type of settlement that the parties are able to reach.
 

 Early mediation, either before a lawsuit is started or shortly after the complaint has been filed, affords the parties an opportunity to discuss settlement before feelings have hardened and before the parties have begun the expensive process of depositions and hiring experts.  If there is any hope of reinstating the plaintiff, early mediation offers the best opportunity because neither side has heard the difficult and uncomfortable accusations that each party usually will make about the other.

 Early mediation, however, does not give the parties an opportunity to explore fully the facts and allegations of the case before they come to the table, which may make a difference in settlement valuation.  If the party needs to stake out the testimony of a witness, in order to know whether an element of a case can be established, then failing to take that deposition before mediation can be the factor that keeps the case from settling.  Attorneys should not rush into mediation without having a crucial piece of information, nor should they time mediation solely to complete the process in order to meet a court deadline.

Practical tips:

• $ Discuss early mediation with your client and with the opposing party.
• Time the mediation to coincide with discovery that will be helpful to the case
• If the parties schedule the mediation too early, the mediator can adjourn the mediation and invite the parties to the table at a later time.
• Give special consideration to the timing of the mediation when agreeing to a pretrial order.
• If an extension of mediation is needed, apply to the court for the extension and consult with the mediator about the mediator’s schedule before seeking the extension.

III. PREPARATION BEFORE THE MEDIATION

A.  PREPARE THE CLIENT ABOUT SETTLEMENT

 Mediations can become difficult for both sides if the parties have unrealistic expectations of what will happen at mediation.  An employee, who has lost a job or who has perceived his or her treatment at his or her employer as discriminatory, also may have experienced a very difficult financial or emotional time.  It is the rare plaintiff who does not believe that his or her painful experience will be recognized and will result in significant compensation from a judge or a jury.   An employer generally does not believe that the company has done anything wrong and may be out to establish that point, as well as wanting to send a message to any future employee who may want to sue.  Frequently, the employer is more emotional about the accusations that have been made and may actually spend more time with the mediator about their feelings that the employee will.

 An attorney representing a party at any mediation, and especially an  attorney representing a party at an employment mediation, should know the settlement value of the case as well as know what the client’s expectations are that derive from this emotional experience.  While the attorney may have handled many cases and know the value of the case, the client usually only has one case and may not value the attorney’s experience.  Many times clients come to mediation having heard about jury verdicts or having conducted their own research on the internet.  The client may be more influenced by outside factors that the mediator and the attorney cannot control.  The attorney should know what those factors are and try to talk to the party before the mediation about what a reasonable settlement will be.

 At the initial meeting with the client, try to find out what the client’s goals will be at the mediation and what the client’s expectations about the outcome will be.  What many plaintiffs and defendants fail to understand is that a mediated settlement will not result in what that either side believes to be “fair” compensation nor will it result in fully compensating the plaintiff for what they have experienced.  Begin to lay that groundwork with the client, and tell the client about mediation in the early meetings.
 
 Talk to the client about reinstatement and your experiences with reinstatement as a settlement provision.  Many employers are reluctant to talk about reinstatement after an employee has been fired and in fact may want the employee never to enter the employer’s premises again.  However, the employer should consider whether reinstatement is a possibility before mediation.  If no job is open, then the employer can provide that information to the plaintiff and the rejection of a plaintiff’s proposal of reinstatement will not seem as personal.  If, at the mediation, the employee only wants a job back, the plaintiff’s counsel should make clear to the employee that failure of the employer to offer to reinstate the employee may have more to do with a general policy than it has to do with the employee’s job performance.  Establish, early on, what your client’s expectations are and explain likely outcomes to your client before the mediation.

Practical tips

• Enlist your client as a partner in the mediation process.
• Learn your client’s expectations about bringing the case and about settlement at the very first meeting.
• Discuss the probability of reinstatement or promotion with a client who has been fired or denied a promotion.
• If a plaintiff has unrealistic expectations about possible outcomes, begin the education process early.
• Educate your client about the litigation process.

B. KNOW THE VALUE OF YOUR CASE

 Before the mediation, the attorney should carefully assess the damages that the plaintiff can recover.  In employment cases, lost back wages should be calculated with consideration given to mitigation.  Front pay should also be determined.  Attorneys argue frequently about how far into the future that front pay will be awarded.  In preparing for the case, find cases dealing with front pay in the same court and with similar circumstances, in order to know what the courts have upheld.  Plaintiffs usually argue that the plaintiff will be entitled to front pay for life and defendants argue that front pay will be awarded for only a few months.  Without support for the argument, neither side will likely persuade the other.  If the plaintiff is asking for damages for emotional pain and suffering and mental anguish, articulate clear reasons for the damages.  If the plaintiff has seen a counselor, talked to a doctor, or taken medication for those reasons, the defendant should be made aware of that.  The defendant should make the plaintiff aware of causation issues that the defendant will argue.  Case law upholding the damages should be brought to the mediation.  In addition, a jury verdict survey or summary judgment results can be helpful to bring to the mediation.

 Be aware of any caps on damages that may limit recovery.  For example, under Title VII, a plaintiff is entitled to back pay, front pay, promotion, reinstatement, if fired, reasonable accommodations, attorneys fees, and costs.   A plaintiff may also assert claims for compensatory and punitive damages. Compensatory damages are relief for: ”future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.”  42 U.S.C. Section 1981a(b)(2).  Front pay is not subject to the caps set forth below.  Pollard v. E.I. du Pont de Nemours & Co., 532 U.S. 843 (2001).  Punitive damages are not available against a governmental entity.

 A plaintiff may be awarded compensatory and punitive damages in intentional discrimination actions.  The statute, 42 U.S.C. Section 1981a(3), provides caps on the amount of compensatory and punitive damages based on the size of the employer:

 15-100 persons-$50,000
 101 to 200- $100,000
 201-500 employees-$200,000
 501 and over $300,000

 While attorneys fees and costs are available to a prevailing party, the partiesare usually more successful at mediation if they talk about expenses and attorneys fees to date.  It is helpful to make the defendant aware of what attorneys fees and cost could be in the future, but calculating them as if they have already been incurred usually does not meet with a positive reception from the defendant.  Likewise, a defense counsel downplaying the fees that the plaintiff’s counsel has incurred will be met with a cool reception by the plaintiff and the plaintiff’s counsel and will usually not be helpful to the settlement process.  The plaintiff should also be aware of the circumstances that the defendant may seek its attorneys fees and costs.  See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978); see Quintana v. Jenne, No. 03- 15443 (11th Cir. 2005). The North Carolina General statutes also limit the amount of punitive damages.  N.C. Gen. State Section 1D-25(b) provides:

 Punitive damages awarded against a defendant shall not exceed three times the amount of compensatory damages or two hundred fifty thousand dollars ($250,000), whichever is greater. If a trier of fact returns a verdict for punitive damages in excess of the maximum amount specified under this subsection, the trial court shall reduce the award and enter judgment for Punitive damages in the maximum amount.

Practical tips:

• Research both case law, summary judgment results and jury verdicts for your type of case.
• When calculating back pay, understand the mitigation issues as well as the job market in the area.
• Make a factual and legal determination of the appropriate front pay issues.
• Have support or defenses for claims of emotional distress and mental anguish.
• Prepare your client for the worse case scenario and have a worse case analysis for the opposing party.

C.  WHO SHOULD ATTEND
 The attorney should carefully consider who should attend the mediation.  The plaintiff may need or want someone to attend for moral support.  Without that support, the plaintiff may be uncomfortable in settling the case at all.  In other cases, the spouse, parent or child may be the one who is actually pushing the litigation, or trying to force settlement, and without that person’s presence, the case will not be settled, or will not be settled at a value that the attorney thinks is appropriate.  Most mediators want to have the person influencing the mediation present for the process.   Any one who will have a significant influence on the decision should be present at the mediation.  Of course, the attorney should consider the extent of the person’s participation.  Many times, a spouse, child sibling, business partner or some other person may be giving the party advice about settling the claim.  The party may either fear criticism from or need the input of this significant influencer.  Failure to include the significant influencer in the mediation may make reaching a settlement difficult, if not impossible.  Whether or not the significant influencer participates in the general session or just in the private session is a question that will have to be determined based on how that person’s presence will affect the other side.  Notify the mediator if someone who is not a party will be participating so that the mediator will be in a position to address any issues that can arise over the attendance of a third party.  All parties should be encouraged to be flexible in agreeing to include nonparties in the mediation if their presence is helpful or necessary.

 From the defense perspective, mediations generally work better in the employment setting if the mediation participant is someone with whom the plaintiff had a good rapport.  Some companies are suggesting that the defense counsel have a separate mediation counsel, who knows the case, but with who did not take the plaintiff’s deposition.  The reason, of course, is so that the plaintiff  will not have negative feelings about the attorney participant. A direct decision maker participant, who may be defending his or her decision, in my experience, usually causes settlement discussions to bog down.  Bringing a non-decision maker who has a significant role in the company can be helpful because his or her presence shows the plaintiff that the company is taking the case seriously.

 The parties should assess the role of insurance in the case.  In particular, the parties should be aware prior to the mediation of the coverage of any insurance policy.  Moreover, they should assess who will be attending the mediation on behalf of any insurance carrier.  The insurance carrier is required to have a representative present who either has authority to decide about settlement or who can, during the discussions at mediation, “promptly communicate during the conference with persons who have such decision-making authority.”  Rule 4 (A)(1)(b), N. C. Rules Implementing Statewide Mediated Settlement Conferences in Superior Court Civil Actions.   See also LR 83.10e (d), M.D.N.C.  (“full authority” required).  In any event, if the insurance adjustor is the one who will be making the decision, from the standpoint of all of the parties, in order to participate fully in the mediation process, his or her presence may be necessary to the settlement discussions.

 What should you do if one party notifies you that someone required to be present will only be available by telephone?  Many times, the defendant may notify the plaintiff that a decision maker will participate only by telephone.  The plaintiff’s counsel wants to object, but does not want to alienate the person who will be making the decision.  A mediator can prove to be a valuable resource for the plaintiff in that situation.  Sometimes, not having the decision maker physically present can actually facilitate the mediation.  Requiring someone to be present who will have to travel a great distance and who really does not want to be there, especially if the person holds the purse strings, may be counterproductive. Without a discussion with the mediator, the attorney may find the client subject to sanctions for failing to have the correct person present.  Rules 4 and 5, N.C. Rules Med. Settlement Conf.; L.R. 83.10e (MDNC).

Practical tips:

• Know who the major influencers in your client’s life are.
• Bring the major influencer to the mediation, after discussion with the mediator.
• Determine who will be attending the mediation for the defendant and make sure that the person who has decision making authority is available.
• Discuss with the mediator whether it is appropriate for a decision maker to participate by telephone.

D.  WRITTEN PRESENTATIONS TO THE MEDIATOR

 Keeping in mind that the goal of mediation is settlement combined with advocacy, the best written presentation to the mediator is one in which the parties are candid about their strengths and weaknesses.  Many times attorneys use written statements to the mediator simply to advocate.  While helpful for an understanding of the facts and the party’s position, such a presentation does not give the mediator an accurate picture of how the case may be resolved.

 Importantly, the attorney must provide the information to the mediator sufficiently in advance so that the mediator will have the opportunity to review the information.  Most busy mediators simply pick up their file the day before and if the information has not been submitted to the mediator in time to review over the weekend or on an “off” day, then there may not be an opportunity for the mediator to review.  Documents such as pleadings, an EEOC charge or a brief that have been filed in the case are frequently helpful for the mediator to review.  If there has been a judge’s decision on any issue in the case, submit that to the mediator as well. 

Practical tips:

• Provide at least the complaint and the answer to the mediator.
• A confidential written mediation statement should be candid and assess the strengths and weaknesses of each side’s case.   
• The statement should contain reasons for settlement that may not be apparent from the face of the complaint and answer.
• Provide information to the mediator days or weeks before the mediation.

E.  CONSIDER A PREMEDIATION MEETING
 If the case involves high emotions and if the client has no experience with litigation, a premediation meeting with the mediator may be appropriate.  If both of the parties agree, then the mediator can have a premediation meeting at a place where the plaintiff is comfortable  to discuss some of the issues that will arise at mediation.  Each side can schedule the meeting at a time and place comfortable to that party.  Such a meeting, days or weeks before the mediation, gives the parties on both sides an opportunity to feel comfortable with the mediator and to express some of the emotions that will be expressed at the mediation.  While the meeting will create an additional expense, the meeting will generally shorten the time spent on the day when all of the parties are together.

Practical tips:

• Schedule a premediation meeting in an emotional case.
• Allow the client to talk about all aspects of the case with the mediator.
• Scheduling a premediation meeting with the mediator allows the party to meet and feel comfortable with the mediator before the mediation.

IV.  DURING THE MEDIATION

 A. OPENINGS

 While attorneys all have their own styles at mediation, the presenter should not lose sight of the fact that mediation is about settlement.  The opening session should be carefully thought through.  Stating the obvious, the attorney should consider to whom the presentation will be made.  Many litigators cannot resist making a hard-hitting jury argument in the opening.  When the goal is settlement, such a presentation can have the effect of making settlement almost impossible.  No matter how much the case should be about a company making a business decision and the employee evaluating risk and benefit, the case is always about people and human interaction.  Each side will bring to the table emotions about the basis of their prior relationship, about litigation and sometimes about the litigation process. 

 One way to gauge what type of presentation should be made is to call the opposing counsel and determine who will be present at the mediation.  A discussion with the opposing counsel may give insight into the personalities of the parties who will be present and thus help the presenter focus the presentation appropriately.
 
 Whether the plaintiff or the defendant representative speaks in the opening depends on many factors.  If the plaintiff is sympathetic and wants to speak, then the plaintiff’s presentation may be more persuasive than any legal presentation that the attorney makes.  If the plaintiff becomes too accusatory or personal in his or her presentation, then the benefit of having the plaintiff speak can be lost.  Weigh what the plaintiff wants to do, who will be present for the defendant, and what type of presentation the plaintiff will make before deciding whether the plaintiff will participate in the opening.  Similarly, a sympathetic defendant who has had a good relationship with the plaintiff who speaks in the opening may help diffuse any emotions.  The opening may be a good time for an expression of appreciation for work that the plaintiff has done for the company. 

 Parties should give consideration to waiving the opening statement where both sides are emotional, or to giving only the briefest opening.  The objection many attorneys have to a soft opening approach is that the other party may not be hearing the weaknesses of the case from counsel.  If that is the objection, then the attorney can request that the mediator convey the negative information.  Most mediators can convey the information in a way that educates the parties, but does not alienate them.  Waiving openings is generally helpful in sexual harassment cases or in cases where there will be direct accusations made about one of the participants.

Practical tips:

• Consider your target audience in making your presentation
• In highly charged cases, consider waiving the opening.
• Discuss with your client the appropriateness of making a statement.
• If you want the opposing party to consider any material that you have, such as a video, or affidavits, present that material in the opening.

 B. PRIVATE SESSIONS

 During the private sessions, attorneys should be candid with the mediator.  Often, the attorney continues only to advocate and will take extreme positions.   Such posturing may result in an early impasse, and will, in any event, make it very difficult for the mediator to work with the parties to assist in settlement.

 Some attorneys appear to have instructed their clients not to talk to the mediator during the private sessions.   Many clients very much need to talk to the mediator during private sessions.  Having an independent person hear about their experience can be helpful to moving the case beyond the emotion.  While some clients can spend what seems to be an inordinate amount of time telling the mediator about the facts of the case, generally the client wants and needs to talk to the mediator about what has happened before they can move on to settlement.

 Most experienced employment law mediators will know how to assist the parties in crafting their demands to the other side.  If the mediator is kept in the dark about what the party’s true interests are, the mediator is limited in how the mediator can assist.  Resist the urge to tell the mediator how to do his or her job.  If you have selected a mediator for that mediator’s experience, trust that mediator’s instincts.  Offering suggestions is certainly appropriate; however, premising any statement with “I’m not going to tell you how to do your job, but you need to,” is generally not helpful.

 Do not rush the mediation.  The process of participating in the negotiations is essential to the success of mediation.  Many times the parties become impatient.  As long as the parties are discussing settlement with each other, the case has the possibility of settling.  Trust the mediator’s instincts and stick with the negotiations.  Failure at mediation can lead to longer involvement and more headaches in a different venue.

Practical tips:

• Let your client talk to the mediator in the private session.
• Let the mediator do his or her job.
• Patience, patience, patience!

 C.  MEDIATION SETTLEMENT AGREEMENTS

 At mediations where the parties reach an agreement, the parties may sign an outline of a mediated settlement agreement.  Typically, all of the terms are not in the outline and a longer more complete settlement agreement is prepared for later signing by the parties.  Many defense counsel are now beginning to bring their standard settlement document to the mediation so that all of the terms will be clearly understood by the parties. 

 Attorneys representing plaintiffs in employment mediations should consider common settlement terms that may be included in any general release and settlement agreement.  First, the plaintiff should understand that if an agreement is reached, an outline of a general release and settlement agreement will be submitted to the plaintiff for signature at the conclusion of the mediation.  Attorneys should educate the client that a longer and more detailed general release and settlement agreement will be signed days or weeks after the mediation.  Understanding that both sides, generally, when they are resolving their dispute, are giving up any and all claims that the parties have against each other may not be understood by the parties.  Preparing the clients for this almost certain provision can make the process at mediation smoother.  
 
 The plaintiff should be aware that confidentiality will likely be an issue as a provision of the mediated settlement agreement.   In cases involving public entities, confidentiality may not be appropriate.  N.C. Gen. Stat. Section 132-1.3.  Some attorneys may argue that the plaintiff can be bound by confidentiality even if the government cannot.   In many cases the plaintiff may consider publicity about the settlement to be a matter that the plaintiff will not waive.   Whatever the parties’ positions are concerning confidentiality, attorneys should discuss the issue with their clients and also apprize the mediator at an early stage in the mediation of their client’s position on confidentiality.
 If there is a confidentiality agreement, the remedy provision for breach of the confidentiality agreement should also be discussed by the attorneys with the parties before the mediation.  Some defense attorneys want liquidated damages, while others demand complete disgorgement of the settlement proceeds.

 If the parties have some idea about what language they want to use when disclosing the fact that the case has been settled, then that language can be included in a settlement agreement.  Some attorneys suggest that the plaintiff, when asked, respond only with language such as “I can’t talk about it” or “we have settled our differences.”  Agreeing on the language about what third parties can be told about the settlement at the mediated settlement conference can prevent concerns about breach of the confidentiality agreement later on.
 An alternative to a remedy provision for confidentiality is making settlement payments to the plaintiff over some period of time.  Making payments over a period of time may give the defendant some assurance that the plaintiff will feel more bound by the confidentiality provision, at least until the final payment of the settlement is made.
    
 Another common term in settlement agreements is the date of payment.  The plaintiff can demand that payment be made on or before a specific date.   The plaintiff should determine what is a realistic date for payment of the settlement proceeds.  Knowing the realistic time period for payment of the settlement proceeds can be extremely helpful to getting the case resolved.

 Another standard provision that should be discussed with the plaintiff in a no-admission of liability clause.  Plaintiffs who participate in the mediation process may expect the defendant to admit liability.  A plaintiff who has been told that most settlement agreements contain a no-admission of liability may be more likely to participate fully in the mediation process.  Usually, in addition to a no-admission of liability provision, one of the parties may also want an agreement that the parties will not disparage each other.  Again, attorneys representing governmental agencies take different positions on the viability of these provisions.  Each attorney should determine, in advance of the mediation, the client’s position on nondisparagement.

 The plaintiff may also need to explore what type of tax treatment the proceeds of any settlement will be given.  Most plaintiff’s attorneys are not experienced in the tax arena and the plaintiff may want to have a CPA or other tax consultant available to aid in evaluation of the proposal.  The plaintiff needs to understand before the mediation that the settlement proceeds of an employment case will be subject to some form of taxation.  The defendant should also know how the company will treat any payments and should have an understanding of what the tax implications for the company will be for the payments.

 The plaintiff may be asked not to reapply for work with the defendant employer.  Usually, if the employer includes that provision in the settlement agreement and the plaintiff is willing to agree to the provision, the plaintiff can also asked for a reference for future employment.  If the employee has a good work record with the employer and has had good evaluations, then a reference can be based on early evaluations.  Good attendance and good job performance can be noted on a reference, if accurately reflected in the employer’s records.

 In addition to references, the employee can be creative in asking the employer to help future job searches in other ways.  Oftentimes, if the employer uses an outplacement firm, the employer may be willing to make the outplacement firm available to the plaintiff.  The employer may also be willing to change the internal designation of why the employee left.  Many times the employee may assert that they were fired, when the employer has designated in the company’s records that the employee quit.  An agreement on how the employment ended may help the employee honestly complete an application and may lessen the employee’s fear about listing the employer on the next application.

 There are numerous terms that can benefit the employer and the employee that can be negotiated at mediation.  One of the advantages of mediation in the employment law arena is that the parties can each achieve an agreement that give each party terms that they may find desirable.  While the parties may not place much monetary value on these items, reaching an agreement on non-monetary items can actually ease the parties’ agreement on a monetary term.

Practical tips:

• Discuss settlement terms with clients before the mediation.
• An apology is a difficult term to negotiate
• Non-monetary items such as references and non-disparagement can be negotiated.
• Discuss the tax implications of settlement with your client before the mediation.

V.  CONCLUSION

 An attorney at an employment mediation should be aware that the approach with the client and with the opposing party should be carefully considered.  Litigation tactics that have their place in the courtroom may actually be detrimental to settlement discussions.  Attorneys should carefully plan who attends the mediation, when the mediation is held and what type of presentation to make.  When in doubt, call the mediator before the mediation and find out how the mediator would like to conduct the mediation.          
 

         

24 October 2007 | Papers | Comments