ADR & MEDIATION
By Charles P. Bauer*
I. Introduction: Employment Mediation
Emotion and Employment Disputes. Employment disputes are fraught with emotion, expense, and uncertainty for employees and employers. Disputes can be resolved by litigation, wherein decision-making authority is abdicated by the employee and employer to relatively disinterested third parties — judge, jury, or appeals court.
Whereas, mediation of employment disputes allows the employee and employer to retain certain levels of choice, control, and conclusion over the emotion, expense, and uncertainty features of employment disputes. As a general principle, parties to employment disputes should consider resolution first through mediation – and then litigation.
II. Mediation vs. Litigation
Benefits of Mediation. Mediation is an agreed-upon process, managed by an independent mediator (chosen by the parties), who facilitates the employer and employee to reach their own resolution of the dispute by agreement.
Alternative dispute resolution (ADR) is less expensive and less time-consuming than litigation; has simpler procedural and substantive rules than litigation; is less hostile and emotionally charged than litigation; and is more flexible in scheduling than litigation.
The key difference between litigation (or arbitration) and mediation is that in mediation, the parties retain the decision-making power to reach their own resolution, oftentimes utilizing remedies and relief that are not available to the parties in litigation.
III. General Considerations for Employment Mediations
Choose the Right Mediator. To increase the likelihood of efficient resolution, a mediator who has substantive knowledge of the subject matter should be considered. Selection of an appropriate and trained mediator is particularly important when the parties’ personalities and other characteristics involved in the dispute are considered. For example, an emotionally charged plaintiff may require an especially compassionate mediator; whereas, a tough-minded corporate defendant may require a mediator who has had prior business experience representing and defending employment matters.
Location of Mediation. Location of the mediation is an important consideration. Selecting a neutral location is oftentimes best, but in some instances, special considerations must be given to the delicate balance between the plaintiff and defendant.
When to Mediate. Timing of the mediation is important. Sufficient facts must be identified and developed, but significant expenses must be taken into consideration. Whether to mediate before, during, or after depositions, independent medical examinations, or expert disclosures are all issues that need to be carefully considered.
Who Should be at the Mediation. Clients should be prepared for mediation. The process of negotiation, compromise, and bargaining should be discussed and explained to the client prior to the mediation session. All individuals who have a significant impact on the decision-making process should be at the mediation, or at the very least, be readily available by videoconference, telephone, or e-mail.
Economic Terms — Money and Taxes. Be aware of tax implications of employment resolutions. Be clear on all settlement issues. Discuss and understand all “boiler plate” terms and conditions of settlement agreements, including tax language, indemnification language, non-admission language, confidentiality language, and dispute-resolution language.
Non-Economic Terms. Careful consideration should be given to non-economic items as part of the settlement of employment disputes which oftentimes are not available through litigation, such as letters of recommendation; handling personnel files; designating a spokesperson for references or inquiries; non-compete language; no re-apply language; joint press release language; money paid over time; outplacement services; sensitivity training; regret or apology language; charitable contributions; structured settlement or annuities; and scholarships or trusts, and others.
Impasse. If an impasse occurs at the end of the mediation, serious consideration should be given to continued mediation after more discovery; a mediator’s proposal; or an agreement to arbitrate.
IV. Best Practices for Advanced Mediation of Employment Disputes
ADR resolution involves preparation, thought, courtesy, decency, respect, and reasoned exchange of information. “Rambo” tactics, “scorch the earth” advocacy, cut-throat techniques, and “slash and burn” conduct rarely produce resolution through the ADR process.
- Be patient and creative. Think of options – economic and non-economic factors.
- Select the right mediator for the case and parties.
- Consider a pre-mediation telephone conference with the mediator to give the “lay of the land”.
- Understand/appreciate the decision-makers in both rooms – what motivates them. Stand in the other side’s shoes, and consider: what/how much are they going to offer to resolve this case, and why won’t they go any further/higher?
- Have the lienholders and decisionmakers lined up and ready to go.
- Bring new information during the joint mediation session on liability and/or damages.
- Bring all persuasive documents and “hard evidence” to the mediation session.
- Have the client talk to opposing counsel in the joint session, and to the mediator in private session.
- Work during the “waiting session” – be patient and creative; come up with alternatives and options; be flexible and open to ideas.
- Signal to the mediator or tell the mediator: “I need assistance with my client”; “I need assistance with the other lawyer”; “I need assistance with the opposing party.”
- Give the mediator new information each private session — give the mediator something to work with, not just a revised demand or offer.
- During each round of negotiation, send a demand or offer with a rationale.
- Expect and anticipate “ups and downs” during the negotiating process.
- Be prepared to sign a binding settlement document.
- Set aside sufficient time for the negotiation “dance”.
V. How NOT to Conduct a Successful Employment Mediation
Seven (7) Deadly Errors in Employment Mediation
- Wrong people in the process – wrong lawyer, wrong arbitrator/mediator;
- Wrong time to mediate – too early, too late;
- Failure to prepare – don’t omit preparation, strategy, and techniques;
- Failure to listen and learn during arbitration/mediation process – re-evaluate strengths and weaknesses;
- Failure to consider non-economic factors and emotional issues;
- Failure to exhibit important qualities during arbitration/mediation – patience, perseverance; and
- Failure to be courteous, respectful, and decent.
VI. Selection of the Employment Mediator
- Consider the personalities of the parties, counsel, and the mediator.
- Consider the substantive and procedural knowledge of the mediator.
- Consider the respect, confidence, and trust levels of the mediator, parties, and counsel.
VII. Who Should Participate in the Employment Mediation
- Lead counsel
- Parties & spouse/family decision
- Witnesses – lay or expert
- Corporate decision-makers – “turf-wars”
- Other players – i.e., annuity specialist
VIII. When to Mediate Employment Disputes
- After sufficient facts and law are identified, but before significant costs are incurred
- Before or after depositions, IMEs, motions
- Attorneys’ fees and costs
IX. Preparation of Counsel and Clients for Employment Mediation
- Understand the process, and the role of each person in the process
- Anticipate sensitive issues
- Anticipate unrealistic negotiating positions
- Understand the background of the mediator and adverse parties
- Patience, flexibility, open-mindedness, and listening
- Polite and constructive approach
- Prepare authority issues
X. Employment Mediation Written Submission
- Concise statements of issues, facts, law, and positions
- Develop a strategy – what to include; what not to include; tone it down; provide copies of articles, deposition parts, expert reports (keep some information in your pocket for later)
- Outline negotiation process (at least in your own mind)
- Acknowledge strengths and weaknesses (?)
- Confidential submission – preview special problems or strengths in confidence; alert the mediator of need for help
XI. Parties’ and Lawyers’ Roles at Employment Mediation
- Different persuasion and negotiating skills than trial
- Rare opportunity to communicate directly with other party
- Emphasize good faith and good will
- Be open-minded and realistic
- Be firm but diplomatic
XII. Opening Statement in Joint Session of Employment Mediation
- Be polite and respectful but not overly familiar
- Show that you have prepared the case for resolution, prepared the case for trial, and thoroughly, objectively, and professionally evaluated the case
- Emphasize your good faith and your willingness to listen
- Acknowledge belief that resolution will be in everyone’s best interest
- If strong feelings or emotions are present, acknowledge those feelings and emotions, and that it is not your intent to embarrass, humiliate, or inflame the other side
- Outline your position to the other side, the basis for your position, and that you have a good faith disagreement on certain issues
- Close by emphasizing your willingness to work through problems, and your hope that with effort and patience, both sides will reach an agreement
XIII. Some Things NOT To Do During Employment Mediation
- Don’t personalize and don’t try your case as if you were in front of your boss or the jury
- Don’t antagonize
- Don’t discuss money in the presence of the other party; communicate all offers through the mediator in separate caucuses
- Don’t insult or criticize the mediator or opposing counsel
- Don’t make comments calculated to trigger strong emotional responses
- Don’t engage in theatrics such as getting up or threatening to leave
- Don’t insult and don’t create volatile issues
- Don’t underestimate the other side
XIV. Private and Confidential Caucus Sessions during Employment Mediation
- Be prepared to speak openly and directly
- Be prepared to discuss weaknesses of your case in a confidential setting
- Assess the personality and negotiating skills of opposing side
- Look for non-economic as well as economic factors for resolution
- Use the “down time” to analyze and assess your positions
- Prepare for the next several “steps” or rounds of negotiation
- Release substantive information in each round
- Send “signals” through the mediator
- Build trust and confidence with the mediator
- Use the mediator to help broker a settlement by providing information to the mediator to send to the other side
- Try to work through impasses – don’t be counter-productive or an impediment
- Send clear offers and messages with the mediator — know “how to dance”; every competently prepared offer carries a message to competent negotiators
- To overcome impasses, ask “why” questions
XV. Memorandum of Agreement at Conclusion of Successful Employment Mediation
- Not the final settlement document, but should clearly outline all essential terms of the agreement
- Should be signed by parties and counsel
- Be clear on terms, timing, and liens
- If no settlement occurs, shake hands, and leave the door open
XVI. Methods of Employment Mediation
When parties, counsel, and employment disputes warrant sophisticated methods of mediation, mediators may use a combination of methods to assist the parties in reaching resolution. There are generally 3 types of mediation: facilitative; evaluative; and transformative.
The facilitative method of mediation is one in which the mediator does not make recommendations to the parties or give his/her own advice or opinions as to what a court may or may not do with a particular issue or matter. The facilitative approach permits the mediator to assist the parties in reaching an agreeable solution by asking questions, validating points of view, searching out interests, and assisting the parties in finding and analyzing their own options and solutions. Ordinarily, the facilitative mediation is used where a mediator has no substantive expertise concerning the area of the dispute.
The evaluative approach to mediation is one in which the mediator offers his/her opinions and advice about the problems, evidence, and likely outcome of the matter before a judge or jury, and may suggest reasonable settlement terms to assist the parties in reaching resolution. In the evaluative mediation, the mediator oftentimes points out weaknesses in the case during private sessions, and evaluates what a judge or jury is likely to do, and makes formal or informal recommendations during the process of mediation. Mediators must have experience and knowledge, of course, and have the confidence of the parties, to be effective in evaluative mediation. Most mediators employ the evaluative type mediation when the parties no longer have a continuing employment relationship.
In transformative mediation, the emphasis is on improving communication and transferring information so that the parties may transform their relationships as a result of mediation. In employment disputes, the transformative approach of mediation is often useful if there is an on-going employment relationship between the parties.
Charles Bauer is selected for inclusion in The Best Lawyers in America® 2011in the areas of Mediation and Arbitration.
* Charles P. Bauer is licensed to practice in New Hampshire.
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