Mediation as a Modern Alternative Dispute Resolution Device – part 2

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Confidentiality as a Core Principle to Mediation Success

One of core principles that appeals to parties in dispute is the ability to reach a mutually agreed upon resolution while keeping the contents of the mediation held in confidence. Traditional mediation and successful court ordered mediation could be a means for parties to resolve their disputes away from public accessible court proceedings. Externally, this is still a marketable sales point for mandatory mediation. But what if the parties can’t reach a reasonable agreement? Are the negotiations, statements and issues discovered in the mediation session excluded from use in any furtherance of the dispute in court proceedings? Parties may not be so ready to participate in mediation if they are without certainty that the entire mediation session will be held in confidence.[1] Mediators themselves may subject themselves to the loss of trust by parties in the process of mediation if the mediator himself is not immune under claim of privilege from disclosing information to the court.[2]

A key role and basic tenant of mediation is for the mediator to establish trust between the parties and the mediation process. Only after trust between the participants and the process exists will the parties be willing to openly share information in a mediation session. Parties to a mediation session may want to avoid public disclosure of personal facts including financial information, investigative reports, plans, etc. A mediator establishes the foundation of trust through assurances to the parties of his/her neutrality and impartiality and further that anything discussed in mediation, whether jointly or in individual caucuses, will be held in strictest confidence.[3] This is often expressed generally in a mediator’s opening statement including a statement that as a neutral third party the mediator’s role is limited to the mediation session and that any information gained in mediation will not be used in litigation. (This is not a foreign policy to the court system. Federal Rules of Evidence Rule 408 encourages parties to participate in settlement negotiation in liability cases and prohibits parties from using settlement offers as evidence[4]). The mediator relies on his or her position as a neutral party to remain immune from any requirement that might put him or her in a position to divulge information obtained under a presumption of confidence or impressions that would show a tendency or bias toward one party over the other and violate the trust established to facilitate the mediation process. If the mediator cannot assure the parties that the mediator is free from any reporting requirement to the courts, the parties may view the mediator as less than impartial and be more hesitant to disclose information that may be damaging in any further litigation.[5] If parties have a distrust of the litigation process initially, any perception that mediation is an extension to the litigation process where confidences may be revealed creates a valid issue where any mandatory mediation rules should address the need to define the scope of confidential communication in mediation sessions.

Current Issues with Confidentiality

            As courts adopt mediation as a valid option to party dispute, the need for creating laws specific to the needs of confidentiality in mediation poses new questions as to when, if ever, should the protection of the legal process supersede mediation requirements for strict confidentiality. Issues involving first amendment and freedom of information challenge this notion and at least one federal district court held that public policy could supersede any confidentiality in mediation sessions.[1] However, these are the exceptions, and courts have endorsed mediation confidentiality and this adoption by courts in the absence of any statute clearly defining mediation confidentiality may be on track to defining a common law privilege for mediation.[2] For example, in NLRB v. Joseph Macaluso, Inc., [3]mediated negotiations failed between an employee union and a retail store chain in Washington State over contracts and back pay. After many months of failed negotiations the parties agreed to attempt to settle their disputed interests enlisting the help of a Federal Mediation and Conciliation Service mediator. When mediation attempts failed to reach a favorable agreement, the parties continued their dispute in litigation. During the course of litigation, the union sought to subpoena the mediator to elicit testimony that would give credibility to the union’s version of the facts that no agreement had been reached. In the absence of this credibility the court found that an agreement had been reached. A subpoena was subsequently revoked based on a contention that 1) mediator testimony is confidential, 2) that confidentiality is crucial to maintaining neutrality, and 3) that a mediator may not testify about the bargaining sessions they attend.[4] One can imagine the situation presented to both the mediator and the union. Upon review in the United States Court of Appeals, Judge Wallace framed the issue:

“We must determine, therefore, whether preservation of mediator effectiveness by protection of mediator neutrality is a ground for revocation consistent with the power and duties of the NLRB under the NLRA. Stated, differently, we must determine whether the reason for revocation is legally sufficient to justify the loss of Hammond’s (the mediator) testimony…[5] The facts before us present a classic illustration of the need for every person’s evidence: the trier of fact is faced with directly conflicting testimony from two adverse sources, and a third objective source is capable of presenting evidence that would, in all probability, resolve the dispute by revealing the truth.”[6]

After a careful analysis balancing the public’s interest in preserving the mediation process with the interest in discovering the truth of party testimony regarding the mediation the court concluded:

 “ …that the public interest in maintaining the perceived and actual impartiality of federal mediators outweigh the benefits from [the mediator’s] testimony…[7] To execute successfully their function of assisting in the settlement of labor disputes, the conciliators must maintain a reputation for impartiality, and the parties to conciliation conferences must feel free to talk without any fear that the conciliator may subsequently make disclosures as a witness in some other proceeding, to the possible disadvantage of a party to the conference… The resultant injury to the public interest would clearly outweigh the benefit to be derived from making their testimony available in particular cases.”[8]

 

[1] United States v. Kentucky Utils., 124 F.R.D. 146, 150 (E.D.Ky.1989).

[2] Kent , supra note 4, at 316-17.

[3] 618 F.2d 51 (9th Cir. 1980).

[4] Ibid. at 53.

[5] Ibid. at 53.

[6] Ibid. at 54.

[7] Ibid.

[8] Ibid. at 56

 

 

Attachments to this Article

• RiflemanConfidentiality.pdf