Going to mediation involves more than simply placing your client and case in the hands of a good mediator. Your own actions and preparation as counsel for one of the parties can go a long way to improving the mediation process. Here are some suggestions.
Selecting the Mediator
There are certain absolutely indispensable qualities that you must require of any mediator. Obviously, any mediator must possess the highest levels of honesty and integrity. Any mediator must be scrupulously neutral, unfailing polite, and doggedly persistent.
Beyond the necessities, choosing a mediator involves the selection of styles. Do you want a mediator who is merely a good listener, or do you want someone who can persuade, as well? In the area of employment law, counsel will often be seeking a mediator who can participate actively in evaluating the case. For this, knowledge of the substantive law can be a great asset. Counsel on both sides may want help explaining to their respective clients the risks that lie ahead if no settlement is reached. The client will be most likely to listen to the mediator if the mediator (1) can speak with authority about the law; (2) is familiar with the case; and (3) knows how to begin by first listening to the client.
If you want an active mediator, consider who, ultimately, will need persuading. “The opposition,” you say instinctively. But think back to your last mediation. The last hold out may very well have been your own client. Remember also that you were able to observe and evaluate the mediator working with your own client, but not with the other side.
Setting the Time
In a heated negotiation, minor logistical disruptions tend to be taken as shows of bad faith. Consider the hypothetical situation of a mediation interrupted as a participant announces she has plans for the evening that cannot be altered. If a participant on the other side made that announcement, how would you or your client react? Most likely you would feel the other side had never really been committed to settlement in the first place.
Planning ahead can make logistical disruptions less likely. If your mediator doesn’t do so, you should be sure that all the participants are clear on how late in the day everyone can stay. If possible, obtain a commitment from each to stay until an agreed time, say, “at least until 10:00 p.m.” “As late as necessary” is too vague. Someone will take this as a license to tell the babysitter she can go home by 7:00.
Preparing the Client
As an experienced advocate, you know how to prepare the presentation you will make at a mediation. You absorb the facts, you learn the law, and you prepare an impassioned exposition of your side of the case. Beware of spending all your preparation time thinking as a courtroom advocate, and not enough preparing your client for the negotiation itself. Without advance preparation from you, your client may be inclined to hear your persuasive presentation at the beginning of the mediation and assume there will be nothing to do during rest of the day but spin daydreams about how he will spend his settlement. When the other side balks, your client may be confused and angry.
Some mediators like to begin a mediation with a pep talk full of sugary comments about understanding, reconciliation, and common ground. Mediators do this because it’s what they learned to do during mediation training, and because they think it helps if everyone starts off smiling. In my view, it sends the wrong signal.
A day of mediation is no walk in the park. It is more likely to be a grueling, arduous, intense negotiation session. The outcome may remain in doubt until the last moment. It can be particularly tough on plaintiffs in employment cases, for their self-worth will be tied up in the negotiations. The plaintiff will feel, “They victimized me on the job, and now they’re trying to do it again.” The rigors of negotiation will be easier to take if the client knows what to expect.
At a recent mediation, one of the plaintiffs asked me, “So this is like buying a used car?” He had been offended by the small amount of money the defendant was offering him in settlement, and I had suggested that the defendant might improve its offer over the course of the day’s dealings if the plaintiff stuck with it. (He did, and the case settled four hours later.) I conceded that, in some ways, a mediation was very much like negotiating over a car: a back-and-forth process of haggling. Just like buying a used car, parties choose their initial and intermediate negotiating positions largely for the purpose of manipulating the other side.
I kept considering his question, looking for the argument that would prove his accusation to be unfair. But the more I thought about it, the more I decided that employment mediation was actually worse than buying a used car. Here’s why: negotiating parties usually choose their bargaining positions with reference to the alternatives that exist outside the negotiation.
They weigh what will happen if they don’t reach an agreement and try to make a deal that improves on that expected outcome. That is relatively easy to do with automobiles. So many are bought and sold every day that we can predict with both confidence and accuracy what will happen if a particular negotiation fails. Employment lawsuits are very different. The range of possible outcomes is usually much greater and there is a large component of randomness in determining which among the many possible outcomes will actually occur.
The greater range of possible outcomes has two effects. First, it causes the parties’ initial negotiating positions to be far apart. Each side says, “I expect total victory in this case, but in the interests of compromise, I propose a settlement that acknowledges a slight risk of loss on my side”. The large gap that usually divides the parties early in the negotiation of an employment case results not from bad faith (as the parties usually allege), but from the great disparity in possible outcomes in the case and the difficulty in predicting which will occur.
At the same time, the difficulty in predicting outcomes with confidence and accuracy tends to produce the opposite effect later on, by encouraging compromise. Usually each side is facing some chance of a serious downside if the case doesn’t settle. (Here again, this differs from a car sale: one can walk away without worrying about attorney’s fees, pain and suffering, or punitive damages.) To avoid the risk of a disastrous outcome, each party is motivated to make large concessions. Thus, parties in employment mediations tend to start off far apart, but usually settle anyway.
It’s also best if the plaintiff understands the notion of limits on authority within an organization. Ideally, each side brings to a mediation a party or party representative with complete authority to settle. The only way to be sure this occurs is for each side to make an opening settlement offer and then insist that the other bring to the mediation someone who could, if he wanted to do so, accept that offer. That rarely occurs. A defendant usually sets a limit on the authority its representatives will bring to the mediation. Diligent plaintiff’s counsel will ask the defendant in advance whether there will be any limits on the representative’s authority and, if so, whether there will be a mechanism for seeking additional authority. Depending on the answer, plaintiff’s counsel may decide that mediation or any other kind of settlement negotiation is or isn’t worthwhile. If the mediation takes place, it’s important that the client understand whatever constraints on authority the other side faces.
Finding Constructive Solutions
While employment mediations are often zero-sum, the parties and the mediator should always be alert to the possibility of solutions that benefit both sides. Constructive and creative solutions are most likely to arise when there is some ongoing relationship between the parties to be preserved. In any negotiation, but especially here, a party should prepare for mediation by making lists of each side’s underlying interests. Armed with this, it is often possible to generate solutions that benefit everyone through a process, either unilateral or joint, of brainstorming. If you want to learn more about this, read the seminal work, Getting To Yes, which should be required reading for anyone who negotiates.
I recently mediated a case involving a dispute over overtime pay. The plaintiffs, who were county employees, were required to take a mandatory one-hour lunch break, but claimed that they continued to perform most of their duties during the break. The case involved a large number of employees, each of whom had an individual story to tell about what he or she did during the lunch breaks. The parties had every reason to seek a solution that would spare them years of litigation over such minutiae. During the first day of our mediation, I worked with each side to articulate critical interests. It turned out that, for the plaintiffs, the important thing was not having to put in what they considered an hour of work each day for which they received no pay. For the county, on the other hand, budgetary considerations were paramount; it could not afford to pay for nine-hour days.
Once we had identified these interests, it was relatively easy to find a solution that satisfied both sides’ needs: The plaintiffs agreed to work a straight-through eight-hour shift, with the lunch break simply eliminated. Since they considered they were already working nine hours without a break, they were happy to reduce it to eight. The county was equally satisfied to see the case resolved without an increase in its labor costs.
Wrapping it Up
If you’ve reached a settlement of an employment case at the end of a mediation, chances are you’re tired and ready to go home. The mediator may be asking you whether you would like to memorialize the agreement in some form; you trust your opposing counsel and are tempted to rely on a handshake.
Resist that urge, at least until you can answer two questions. First, do you want your settlement to be final or merely tentative at this point? In other words, if there were a disagreement as to the contents of a final, written settlement agreement, would you want both parties bound to a settlement or free to walk away? Second, if there were a disagreement over the finality of your settlement, are you confident a court would see things your way?
Obviously, you should know the law in your jurisdiction regarding the finality of settlement agreements. How much do the parties need to have agreed upon in order for a settlement to become enforceable? What needs to be in writing? As with anything else in the law, you cannot know where you stand until you know the rules.
Assuming you want to leave the mediation with an enforceable agreement, take steps to do so. Draft a memorandum summarizing the points to which you’ve agreed. Alternatively, gather everyone around a hand-held tape recorder, have someone recite the terms you’ve agreed to, and have all parties indicate their consent orally, leaving the tape with the mediator. Either way, express clearly whether or not the existence of a settlement is conditioned on agreement as to the terms of a final release document.
Defense counsel need to remember the danger in settlement memoranda. Before you sign one, be sure it contains all of the terms you will want in the final agreement or is expressly subject to the negotiation of a final agreement. If, for example, your memorandum simply says the parties will keep the settlement terms confidential, you may not be able to insist on inserting a liquidated damages provision in the final agreement. The plaintiff will refuse and move to enforce the agreement exactly as it is described in the memorandum, without a liquidated damages provision.
Reproduced with the permission of Aspen Publishers, Inc.