1. By agreement, require early mandatory mediation.
Before a dispute arises, check that all employees have agreed they must mediate prior to engaging in arbitration or litigation. Work with outside employment counsel to craft and incorporate such a provision into all employee handbooks and employment agreements. In that process, you may want to consider JAMS’ excellent suggestions for language requiring early, mandatory mediation.
In the event you are presented with an employment claim for which mediation was not required prior to filing an adversary proceeding in arbitration or court, you might consider saving money and time by seeking, by agreement or order, an early stay of the proceeding so the parties may mediate.
2. Find the right mediator.
Choosing the right mediator is crucial. Employment mediation is a subspecialty of dispute resolution, which especially requires a mediator whom both parties can trust. In many employment cases, prickly or wounded personalities, emotions still raw from unresolved allegations of harm and questions of personal worth do not lend themselves to the type of objective analysis more appropriate for mediation of commercial disputes. Finding the right mediator is where reputation can help. Regardless of a mediator’s background as counsel for companies or claimants, ethical mediators should not have an agenda, other than maintaining fairness, providing their perspective based on their specialized experience, and assisting the parties with making informed decisions. Do your due diligence, seek recommendations and even interview potential mediators to find one who is candid, effective, knowledgeable about employment law, good at listening and unbiased.
3. Prepare, prepare, prepare!
The third key to success is advance preparation and evaluation of the claim, settlement options and risks associated with formal dispute resolution. Consider doing the following in your preparation.
Share information
Using a variant of what is often referred to as “guided mediation,” your mediator should lead the parties through a confidential sharing of information that will enable each to make an informed decision as to the best alternative to proceeding with a formal dispute. This exchange should occur well before the formal negotiation sessions.
Such information sharing includes:
- Exchanging position statements in addition to providing more expanded confidential statements to the mediator;
- Each party having one or more confidential sessions with the mediator and outside counsel to review the mediation statements and discuss issues, risks any additional information needed and bottom-line positions;
- Exchanging draft settlement agreements or outlines, so each party knows the other’s necessary terms, to avoid surprises, address possible deal breakers and allow counsel time to address issues of wording, enforceability of penalties for potential breach of settlement obligations, such as non disparagement; and how to handle provisions affecting other possible claimants or the employer’s business practices.
Assess and evaluate risks
Then, before proceeding to a joint mediation session, in-house and outside counsel, insurance carriers and all other decision-makers should review each party’s accumulated information and conduct any further investigation or research they conclude to be necessary. Counsel may be asked to provide a report on recent jury verdicts in similar cases and to prepare a decision tree analysis and a detailed budget for the arbitration and/or litigation that would result if the case were not to settle.
Then, in-house counsel should lead their team through a careful and honest evaluation of the costs and benefits of each possible settlement scenario and dispute resolution option.
4. Begin negotiations with a constructive use of the first joint mediation session.
Now that you are ready for negotiations to begin, you should avoid the mistake of waiving the initial joint session or failing to use it constructively. A recent study[1] of mediations in which at least one party was an individual found that keeping those parties isolated for extended time periods, with nothing to do but wait while the mediator met with the other side, decreased the likelihood of settlement and increased those parties’ dissatisfaction with the process.
As an alternative, not only should the caucuses be kept short, but you also should consider allowing claimants to make full presentations in the initial joint session so that they feel fully heard. While still in joint session, the employer may respectfully and sensitively make it clear that the complaints have been received. It may demonstrate its desire to understand anything unclear by non-argumentative questions. But the employer should not—in that opening session—respond with a rebuttal. The mediator can decide when and how best to communicate the employer’s responses or concerns.
Following the recommendations above should bolster an employer’s confidence that it has thoroughly explored whether and when to settle a given dispute. That is a hallmark of a successful mediation.
Patricia H. Thompson, FCIArb, CollArb, is a JAMS mediator and arbitrator with extensive experience in resolving complex employment disputes. A former trial lawyer and seasoned mediator, she has handled matters involving discrimination, harassment, wrongful termination and violation of noncompete and other workplace policies across a wide range of industries, in addition to her construction, insurance and complex commercial practice. She is recognized for her practical, solutions-oriented approach that helps employers and employees reach fair and efficient resolutions. She can be reached at https://www.jamsadr.com/thompson/.
[1] The study is titled “What Works in Alternative Dispute Resolution? The Impact of Third-Party Neutral Strategies in Small Claims Cases” by Lorig Charkoudian, Deborah T. Eisenberg & Jamie L. Walter, U of Maryland Legal Studies Research Paper No. 2019-11 (10/07/2019).