Recently, courts across the country have seen an increase in employment law claims. Given its strict Labor Code and discrimination laws, this trend has been especially prevalent in California. A very high percentage of these employment claims are resolved through the mediation process. Skilled advocates addressing these types of issues can work with their clients to utilize the following best practices in planning, strategy and mediation advocacy in that process.
Part 1 of this article will focus on the early stages of an employment mediation: preparation and planning, valuing the case, considering non-monetary solutions, and the initial presentation of the case through writings and first conferences, joint or otherwise.
- Explore your best, worst and most likely alternatives to a negotiated agreement.
Parties should come to a mediation with realistic expectations about what will occur and the need for compromise. This requires advance consultation between the lawyer and the client, preparation and planning. Counsel must learn what their client wants and frankly discuss whether that is realistic. To value the case, each party should explore its’ best, worst and most likely verdict results. Approaches include decision-tree analysis, jury verdict research, mock juries and less formal approaches, impacted by fact developments, witness strengths and weaknesses, motion practice and court rulings, the venue and likely jury panel. This should be done prior to the mediation to avoid making important settlement decisions on the fly.
There are multiple factors that can impact this valuation in employment cases. The economic damages should be subject to calculation, but noneconomic damages including emotional distress and punitive damages are more subjective and subject to dispute. In wage-hour cases, there is often a sharp dispute over whether meal and rest breaks were taken. Another factor is the availability of recovery of attorneys’ fees by the prevailing party. Finally, the cost of prosecution or defense will impact each party’s positions.
Develop three numbers: your opening offer, the likely verdict range and your walk-away number and seek to anticipate your opponent’s likely ranges. Each side’s bargaining range is bounded by its opening offer and its walk-away number. The overlap between the parties’ ranges is the zone of possible agreement. If plaintiff’s walk-away number is higher than defendant’s walk-away number, a negative bargaining range exists. Unless one or both parties recalibrate, in such a case there will not be a settlement.
- Take into account non-monetary considerations: apology, reference letter, reinstatement.
Employment settlements may include non-monetary interest-based concessions. The most common are an apology, a positive or neutral reference letter, or reinstatement. Other possibilities include re-employment in another capacity or extension of the termination date, to enable the vesting of benefits or continuation of health care, or to enable the employee to secure alternative employment. Tuition payments, training or retraining, outplacement assistance, and company stock buy-backs should also be considered.
- Create an effective and comprehensive mediation memorandum.
Write a persuasive summary of the claims, facts and law relating to liability, causation, damages and collectability, including a chronology. These should be exchanged. A private letter can be given to the mediator to highlight confidential information, negotiation strategy, client issues or problems. The goal in the exchanged memos should be to tell your client’s story and help the opposing party understand your position and support and thereby assess their risks.
Important documents, employment contracts and policies and e-mails should be included. Describe the evidence regarding alleged discrimination, pretext, retaliation or sexual harassment or underpayment of wages or denial of breaks. Charts, graphics and other visual aids can persuasively summarize chronologies, data or organizational relationships.
Explain the alleged damages and calculations, including unpaid hours, rates, overtime, meal and rest breaks, how alleged errors occurred, lost back and front pay, lost benefits, mitigation, emotional distress, punitive damages, lost commissions, stock options or deferred compensation, including the sales cycle, vesting periods, and contractual protections. Prior settlement demands or offers should be disclosed.
- Make the most of your prehearing conference with the mediator.
Increasingly mediators conduct separate prehearing conferences with each party after the exchange of memoranda. Make this your start of the mediation discussions to jump-start the beginning of the in-person sessions. Use your time to tell the mediator about any backstories, obstacles to settlement, issues you perceive with your client and the opposing party, insurance coverage, and how settlement can be achieved.
- Prepare yourself and your client for more effective oral presentations in mediation.
Plan client presentations, either for joint session or a private caucus. The clients can best describe the interpersonal or performance issues that preceded the litigation, and how they were impacted, with a level of granularity and emotional detail that cannot be matched by their lawyers. When lawyers describe the facts, they tend to overplay the rhetoric and repeat what they have written in their memoranda. The lawyers’ roles should focus on the application of legal principles to the facts presented by the clients as well as the overall message. A civil, polite approach is advisable. An overly aggressive joint session presentation can easily backfire. Charts, graphics or visual aids are highly effective in such a presentation.
- Deal with emotion in the mediation.
Emotions should be expected and are natural in employment litigation. This is a forum for the participants to tell their story, and emotional catharsis can begin a healing process for the participants. If in a joint session, it is important for the opposing party to listen respectfully, with no overt negative responses, verbal or nonverbal. Many employers do not want their personnel to make emotional or negative counter-presentations in joint session, as they may be counter-productive. Depending on the circumstances, the parties may wish to look for an opportunity later in the mediation for the employee and an employer representative to have a face-to-face meeting to explain their feelings and actions and, as appropriate, to offer an apology. When an apology is heartfelt and spontaneous it can help bring emotional closure to the events.
Part 2 of this article will follow in a subsequent post.