Got an Employment Case? Consider Mediation

mediation_80405170Deciding whether and when to mediate an employment case can be complex, but here are some factors that will help both sides of the case make the decision.

Start from the position that there are tremendous advantages to mediating employment disputes. For the plaintiff, a successful mediation can result in a fair settlement, more timely compensation, and the avoidance of continued litigation, which is often emotionally draining. The employer has the potential advantages of saving a lot of money in defense costs and avoiding the risk of a large adverse verdict and an unfavorable precedent.

But even knowing those advantages, attorneys for both sides should consider the following when deciding whether, and when, to engage in mediation:

  1. Is it realistic to believe that mediation will be successful? Are both the client and the opposing parties willing to mediate in good faith? For mediation to succeed, both sides must be willing to enter the process with an open mind.
  2. What will it cost to mediate the case? Some mediators charge an hourly rate, others a flat daily rate. It’s important to have a clear understanding of what the mediator’s fees are and to agree on which party will pay those fees. In addition to the mediator’s fee, factor in other costs, including attorney time and expenses in preparing for the mediation, drafting a mediation brief, preparing the client, and attending the mediation. These costs may be extensive and are often underestimated.
  3. What would it cost not to mediate the case? Although it’s important to consider the cost of mediation, it is equally important to consider the cost of not mediating. If mediation is the best hope for reaching a fair settlement, to forgo it may, in essence, be a decision to proceed with an expensive lawsuit.
  4. Is there a mutually acceptable mediator who is likely to be effective? It’s very important to consider who would be the most effective mediator and be acceptable to both sides.
  5. Will the necessary parties be present at the mediation? Plaintiff’s counsel must be sure that an officer of the defendant employer with full settlement authority and an insurance adjuster (if there is insurance coverage) will be present and available at the mediation for as long as it takes to reach a resolution. One of the chief causes of failed mediation is the absence of a company representative with sufficient settlement authority.
  6. Will the mediation fulfill the client’s emotional need for a “day in court”? It may be emotionally fulfilling for a plaintiff to be heard by a jury, and mediation followed by settlement can deprive him or her of that opportunity. But it can also be sufficiently cathartic for a plaintiff tell his or her story to a mediator.

Keep in mind that success in litigation is often a Pyrrhic victory when the actual and emotional costs are taken into account. Mediation may be the perfect way to balance the parties’ needs and resources.

Get guidance on all the issues involved with mediating and arbitrating employment disputes, including terms to include in a mediated settlement agreement, in CEB’s Advising California Employers and Employees, chapter 20. Also check out the ADR chapter in CEB’s Wrongful Employment Termination Practice: Discrimination, Harassment, and Retaliation.
Related CEB blog posts:

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  1. […] Got an Employment Case? Consider Mediation […]

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