In the current economy, more individuals and companies are hoping to reduce costs and increase settlement options while resolving employment disputes. Both employees and employers are looking for ways to keep expenses to a minimum while maintaining the integrity of the process. Alternative dispute resolution techniques, such as mediation, have become a valuable resource for both employers and employees given the current state of the economy. The unwillingness of both sides of the equation to spend the extra nickle on attorneys has lead to an increasing need for mediators trained in employment law. In the following article, I set forth my own practical tips for mediating employment disputes learned from two decades of litigating and mediating in the field.
There are numerous types of employment disputes which can be settled through mediation. Among them include, termination disputes, disagreements regarding regular or overtime pay, employment discrimination claims, disagreements as to FMLA leave, disputes concerning covenants not to compete, and grievances under a collective bargaining agreement. Depending upon state law, workers’ compensation claims and unemployment compensation claims may also be mediated.
The first question from either party might be, “why resort to mediation to settle employment disputes?” The answers are multiple. In some cases the employee may believe that the employer has violated a federal law. In those instances, liability can be significant and it would behoove the employer to find a quick, low-cost method of resolving the dispute. If the dispute should reach the courtroom, a judgment against the employer could be significant, including both the employee’s restitution and punitive damages.
There are other considerations, as well. A settlement, unlike rolling the dice in court, brings the relationship to an end and creates certainty for all parties involved. In nearly all cases, mediation will be a more time effective and less costly method of resolving a dispute. In mediation, confidentiality is guaranteed, while parties retain their right to attorney representation. In addition, non-disparagement clauses may be included in mediated agreements. Such clauses are not within the power of judges or juries to apply to the outcome of a judgment or verdict.
In alternative dispute resolution, such as mediation, a third party neutral attempts to bring the disputants to the common ground of a mutually acceptable resolution. There are numerous upsides for both employers and employees in the meditation process. The pros to choosing mediation include, the parties select a mediator acceptable to both sides; the mediator’s goal is to broker an agreement, not to reach a particular outcome; mediators are ethically prevented from allowing personal bias or opinion to dictate an outcome; a mediator will not give legal advice; and, mediation is confidential.
There are downsides to choosing mediation, as well. As a general rule, a mediator is less likely to have a breadth of knowledge of employment law. Certainly, a magistrate judge or federal judge will have a better grasp of the federal employment issues involved in an employment discrimination suit. There may be a wide disparity in the interpretation of current law. A mediator is bound by UPL guidelines from giving legal advice for the purpose of resolving misunderstandings or misinterpretations of the law. Regardless, mediation allows the parties to seek the advice of counsel at any point. There is no reason to be completely naked and unrepresented in the process. Involving an attorney remains the right and duty of each participant.
In preparing to mediate, I typically ask that the parties or their attorneys to confer with me in advance of the mediation to agree on the ground rules. At that point, I expect all parties to be ready to agree to time, place, attendees, fees, interested parties, and anticipated duration. I also ask the parties for any pre-mediation submissions, such as a memorandum of law and any discovery which the parties think would be helpful for me to review prior to mediation.
A position statements or memorandum of law should set forth a party’s opening statement. The parties position based on the facts of the case and the applicable statutory and case law should be included. My experience has lead me to request that specific information be included in any opening memorandum. I ask that a short statement of why the party should prevail under the specific facts be woven into the argument. Any arguments made by a party should be bolstered by the applicable law as applied to the facts. I sometimes request a short history of any settlement negotiations and any road blocks to settlement. Finally, I ask that each party assess the value of the case. Each party should be prepared to set forth what it believes are the strengths and weaknesses of the legal position. This position statement gives me the advantage of understanding a party’s concerns regarding settlement before I conduct mediation.
Mediation is designed to be valuable to both parties in the dispute. It may be especially valuable to the employer with concerns beyond its damages liability. For instance, it may be advantageous to keep a matter confidential through mediation. It may also be advantageous to the employer to settle the matter quickly, rather than wade through a court’s docket. Lastly, there are times when an employer wishes to preserve a business relationship through a non-adversarial process of mediation. Of course, the employee may have non-monetary concerns which mediation can satisfy. The employee may wish to ensure a positive reference or some other outside-the-box resolution.
The actual tone and tenor of the mediation proceeding often dictate the outcome. Attorneys are accustomed to zealous representation of their client. This combative stance, however, is not helpful to me as a neutral facilitator. Rather, it is more effective in my eyes to combine advocacy with a cooperative approach. While I would not ask attorneys to stop advocating their client’s position, I would request that all parties be conscious of the other participants’ issues and positions. Here, as with so many disputes in life, the old adage applies, “listen to understand, not necessarily to agree.”
After the opening statements are made and parties understand the rules of mediation, I often begin a series of break-out sessions. During this series of shuttle diplomacy, I have an opportunity to play with a variety of options. No matter how unusual the request may seem, I consider them opportunities to craft an acceptable resolution which both parties will embrace. I attempt to bring the parties to an agreement on the material terms of the settlement which may include non-monetary provisions.
I consider it crucial to have all parties sign a Memorandum of Understanding agreeing to all material terms of the resolution. In my experience, defendant’s counsel will use this document to draft the final settlement document. There is often some back and forth between parties before the final document is signed. The Memorandum of Understanding gives all parties a document to remind them of the initial agreement. The Memorandum of Understanding should include all aspects of the final agreement, including any provisions as to attorneys’ fees, tax ramifications, costs, confidentiality, and non-disparagement clauses.
There are a few general principles which all settlement agreements should have in common. From the standpoint of a mediator, is the agreement easy to understand? Did the employee play a significant role in setting forth the terms of the agreement? Especially where the employee is unrepresented, I consider whether the employee will have sufficient time to consider the proposed settlement agreement or release prepared by the employer’s counsel. Lastly, I like to include a forward-looking provision which addresses the issue of disputes arising out of the settlement agreement. This gives the parties an avenue for settling grievances which arise as a result of a misunderstanding of the agreement or a failure to follow its terms.
These are just a few of the considerations that a mediator may take into account in approaching an employment dispute. There may be state issues to consider which I have not considered in this article. Moreover, a mediator must always keep the relative balance of power in mind as he or she moves through the process. I often encounter unrepresented employees who lack the expertise to consider all the consequences of a given agreement. Be certain to advise all participants of their right to counsel, and be aware of your on-going need to assess the appropriateness of a given matter for mediation. There are times when a mediation can spiral out of control because an unrepresented employee is unaware of the long term ramifications of an agreement.
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