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We cannot ensure equality of opportunity by vigorously enforcing the federal and state laws prohibiting discrimination in employment, while at the same time providing unfair or onerous methods of dispute resolution. As a group of professionals, both lawyers and neutrals, we must demand that dispute resolution systems in which we participate actually be, and appear to be, fair, equitable, accessible, and effective. I. HOW AND WHEN IS IT BEST TO GET TO THE TABLE? It is an age-old question. How do you get the other side to the bargaining table, and when is it best to start trying? The answer is: ‘It depends.’ It depends on the nature of the case, the quality of the information that is available early in the case, the temperament of the other parties and their counsel, and the willingness and ability of your client to go forward if the case does not settle. There are probably dozens of other factors as well. However, since 95% of all employment cases settle eventually, it is never too early to start considering a resolution of the dispute. From the moment a client walks into your office, regardless of which side you represent, you should be thinking about how you can resolve the situation short of trial. A. What are the client’s goals? It may seem obvious, but it is surprising how many people come to see a lawyer without a clear idea as to what they are seeking. It is even more surprising how many lawyers look puzzled when asked what their client’s main objectives are in pursuing a case into litigation. A major part of the lawyer’s task is to help the client understand the available options and to prioritize his or her needs. Although compensation for lost wages usually is high on the list, it is sometimes revealing how far down the list money can be. For example, some employers don’t realize that one of the most serious problems faced by a terminated employee is how to explain to a potential future employer why he or she was terminated. Thus, one of the client’s goals might be reaching a mutually agreeable explanation as to why he or she left the job, or obtaining a favorable letter of reference with an agreement that the employer will say nothing which is inconsistent with the letter. It is important to make a list of the client’s goals and keep it up to date. Although determining the client’s goals at the outset is a key to a successful resolution of the case, goals can change over the course of the case. If the client obtains a new job, the issues surrounding the reference letter may disappear. You must always keep your finger on the pulse of the client’s needs, so that as his or her goals and objectives change, so does your settlement strategy. B. Using Administrative Agencies To Help Resolve Your Case Early 1. Division of Labor hearings Many employment cases that involve termination will also involve an unemployment insurance filing. If the matter is appealed by either side and goes to a hearing, then this can be a great opportunity to discuss settlement of the case with opposing counsel or the opposing party. The referee, however, will provide little or no assistance; any discussions will have to be between counsel only. 2. EEOC or state agency proceedings Employment disputes that involve allegations of discrimination start with the filing of a discrimination charge with either the Equal Employment Opportunity Commission (EEOC) or a state agency, such as the Colorado Civil Rights Division (CCRD). These agencies offer an opportunity to begin settlement discussions with opposing counsel or the opposing party. Much more can be done at this level than simply preserving the client’s rights and exhausting administrative remedies. Counsel and corporate executives lose an important opportunity to resolve cases early if this stage of the case is not effectively managed. Both charging parties and employer representatives should use the administrative agency process to discover information, learn about and understand the other side’s position, and keep open the possibility of resolution. Particularly at the EEOC or a corresponding state agency, there are a number of things that an employee hopes to, and can accomplish, other than merely preserving the right to ultimately file a lawsuit. Similarly, an employer should attempt to use the agency procedure to help it accomplish its goals and not use the agency simply as a delaying mechanism. Both parties should use the process to gain information to move the case toward settlement. For example, at the CCRD, the information submitted by both parties is accessible to the other. Therefore, obtaining information about the claim and the defenses may be a key objective in filing the charge there. The employee may receive his or her personnel file, including performance evaluations and other documents which relate to any performance deficiencies or to the employer’s stated reasons for the adverse employment action. If there are witness affidavits, then these may also be available. Other information that might have been provided by the employer and thus is accessible to the employee includes information relating to a possible joint employer situation, such as a parent-subsidiary relationship; the employee handbook; and information relating to benefits and other pertinent documentation. Similarly, the employer may obtain the employee’s statements as to why he or she believes discrimination motivated the employer’s decision, notes prepared by the employee during the relevant time period, witness statements or other information relating to whether other employees believe discrimination has occurred, and even information as to whether others may join the action. Actively participating in the CCRD’s administrative process can shed considerable light on the case and can provide options for resolution not before considered. Obtaining information at this early stage can greatly assist the resolution process. On the other hand, the EEOC often does not even begin an investigation for about one year, and the charging party is generally not granted access to the file during the investigation process. Like the CCRD, the EEOC will assist with mediation if specifically requested. The EEOC has a new program for the mediation of employment disputes. When a charge is filed, the charging party will be asked if he or she is willing to mediate. If the answer is yes, then the employer will be asked to participate. Participation is entirely voluntary. If the parties agree to early mediation, then the employer’s obligation to respond to the questionnaire and provide a position statement is suspended until mediation can take place. The EEOC will provide trained mediators, but if an agreement is not reached, the case will be referred to the EEOC’s rather slow investigative process to be handled like any other case. C. Why are cases so rarely resolved at this stage? It is often difficult to resolve cases at this early stage. There is a built-in fear of disclosing too much too early in the minds of many parties and counsel. There is the very real problem of lack of access to important information, particularly in the case where many of the key witnesses are managers or agents of the corporation. Employment cases can be very emotion-driven, and there usually are angry and hurt feelings on both sides. The terminated employee may be experiencing panic, depression, and/or fear of the future, which is still unclear and uncertain, particularly if the employee is still unemployed. Economic damages are difficult to estimate at this stage. The employer has not yet been required to do an in-depth analysis of the facts and legal issues and is reluctant to pay more than nuisance value to resolve the case. And, of course, inexperienced counsel who make unreasonable discovery or monetary demands, or who do not fully understand the risk of going forward with litigation, make it difficult for the parties to obtain enough clear information on which to make a decision. In addition, there is a tendency in this society to deny wrongdoing. This applies to the corporation which, facing accusations of discrimination or other wrongdoing, is far more likely to circle the wagons around the alleged offending manager than to agree that something may not have been done correctly. It also applies to many terminated employees, who cannot or will not take responsibility for alleged poor performance. Thus, many cases that perhaps could be resolved early go forward into litigation. II. DESIGNING/SELECTING THE SETTLEMENT PROCESS A. What are the choices? 1. Court-imposed settlement conferences Court-imposed settlement conferences have several advantages over private mediations. Court-imposed settlement conferences are mandatory, there is no cost, they occur at several intervals during the pre-trial stages, and they are conducted by magistrate-judges who often have inherent credibility with the parties. These judges generally have considerable information on the state of the docket, the trial judge’s prior rulings that might affect the outcome, and the current trends of jury verdicts in this type of case. There are certain disadvantages to court-imposed settlement conferences, however. The cases generally receive a limited amount of the court’s time. As a result, many employers appear at the conference only through their attorneys. The lack of cost actually may cause a lack of attention to the process by the parties or their counsel. It is rare at early stages to get a case settled through the magistrate-judges, although certainly most cases eventually do settle before trial, many with the continued assistance of the magistrate-judges. 2. Private mediations There are many advantages to using a private mediator for the resolution of employment cases. The parties are there voluntarily and they are paying for the process. Private mediation therefore gets more attention from the parties and their counsel. The case will receive much more time and attention from the mediator as well; the materials submitted will have been thoroughly reviewed, and the mediator will schedule uninterrupted time for the case. Perhaps most importantly, the parties can design the process themselves. The primary disadvantage to the use of private mediators is the cost. There is also the possibility of bringing in an unskilled or inexperienced mediator, or a mediator who for whatever reason does not have credibility with one side of the dispute. This can, of course, cause the mediation to fail. B. All private mediators are not alike The range of mediations and mediator styles is broad indeed. Some mediators never allow the parties to see each other during the day unless and until the case is resolved. Other mediators believe that, except in the most unusual case (perhaps a case involving abusive sexual harassment), the parties should never be separated. Some mediators never talk to the parties until the date of the mediation. Others prefer to discuss the key issues with the parties and counsel prior to the mediation date. Some mediators are facilitative; that is, they do not opine as to the merits of the case. Rather, they work the parties toward a consensus by focusing on the needs of the parties, not the issues in the case. Other mediators are evaluative; that is, they review the factual and legal issues in the case, and bring to bear their experience as to how the case may end if tried in court. In this way, evaluative mediators persuade the parties to compromise their positions to avoid the exposure and the risk of losing the case at trial. Not all cases demand the same style. Counsel should discuss with their clients what they hope to accomplish in the mediation and what type of mediation format will best facilitate the result. What does the client need from the process? Is the employee afraid to see anyone from the company, or does he or she need to address the president of the company to express what went wrong? Does the client need to speak to the decision-maker about how the termination affected him? Does the employer need to share with the employee his or her feelings of betrayal? Can the employee handle such a confrontation? Another significant value to a private mediation is that the parties can move the case creatively in ways not practicable through the court system. Consider whether the mediation process would be more effective if one party or both produced information yet to be discovered through an agreement that would not prejudice their rights in court if the case does not settle. In many cases, an early mediation can effectively move forward with limited pre-mediation discovery monitored by the mediator. Perhaps the employee has not yet produced the medical records that establish the claim for emotional distress, but the records are available. In exchange for certain records from the employer, the employee might agree to produce the medical records. Perhaps the mediator could speak to the mental health provider to obtain unfiltered information as to the extent of the injury. In some cases there is a dispute as to what a key witness will say, but he has not yet been deposed. Consider whether it would help the process if the mediator could speak to the witness. An unlimited number of options can be utilized in private mediations that are essentially unavailable through the court system. The important point is that the mediation process belongs to the parties, and counsel is remiss if different processes are not considered. Other factors to be considered include the cost, and who is paying the cost; how far along the case is; whether opposing counsel know each other, and how experienced they are; and how sophisticated the parties are with the litigation process. III. WHAT INFORMATION TO GIVE TO THE MEDIATOR? Again, not all mediators are the same concerning the type of information they want from the parties. A facilitative mediator will probably prefer that the parties not provide lengthy written materials that deal with the evidentiary issues and factual disputes. On the other hand, if the parties are using a mediator whom they expect to evaluate the claims and defenses, more information is far preferable to less. Be prepared to provide copies of relevant documents, deposition testimony, and pleadings. Do not leave back at the office documents that could help illustrate the point you hope to make with the mediator. Carefully consider who will be representing the parties at the mediation. This is usually an issue only for the employer, since the plaintiff-employee is always a necessary party to the mediation. If the mediator will be asked to evaluate the claims and the likelihood of a jury verdict for the defendant, then the mediator will need to see the key witnesses, perhaps the decision-makers. Also, it is destructive to the process not to have present at the mediation the person who truly controls the decision to resolve the case. Much momentum can be lost if phone calls go unanswered and the last dollars to close the deal cannot be obtained. Be mindful of time differences in different parts of the country. If the adjuster is in New York and will be unavailable after 5:30 p.m. New York time, then that may be a problem. Many mediations reach the peak of negotiations between 3 p.m. and 4 p.m. Make certain the mediator knows ahead of time if there will be a problem having a key decision-maker present. If a structured settlement is likely, then have available the necessary experts to compute the annuities and other possible structures, and understand the tax consequences of such settlements. Think about all of the financial possibilities ahead of time, and be prepared to respond to offers or make offers utilizing such structures. At the very least, have someone available by phone who can compute these numbers. IV. HOW TO SELECT A SETTLEMENT NEUTRAL A. The essential qualifications of the neutral Employment cases are not about business partners who changed their minds or strangers who ran into each other under a traffic light. One does not work an employment case by reconstructing the scene of an accident, by measuring skid marks, or by reviewing architectural designs and daily progress reports on a construction site. Employees who believe that they have been treated wrongfully in the workplace, e.g., discriminated against on the basis of their gender, race, age, disability or other grounds, or just treated unfairly, do not simply believe it to be so. They feel it is so; they feel it with every fiber of their being. They feel that they are entitled to their day in court, and they want their case to hit the front pages of every newspaper in town. Similarly, employers do not appreciate being labeled sexist, or bigoted, or unfair in their treatment of employees. They often are worried about causing ‘the flood gates to open’ if they settle a case they feel has no merit. Consequently, employers take such allegations personally, as well. Employment cases are about careers, about rejection, and about volatile issues such as sexual harassment. They are about relationships, families, trauma, and depression. These cases are about values and human behavior. In order to increase mediation’s potential to resolve employment disputes, consider carefully who has the ability to understand both employer and employee perspectives, and select a neutral who can develop methods that bring the parties to a consensus. Because emotions run so high in employment cases, they are uniquely suited to resolution through mediation. B. What does ‘neutral’ mean? The term ‘neutral’ is difficult to define in this context. Clearly, everyone involved brings to the table his or her background, past experiences, biases and judgments. People naturally view issues differently, observing the same facts from a different vantage point. A neutral of course must be objective, independent, and open to new or different situations. It is important that the neutral understand the perspectives of the employee, co-employees, supervisors, managers, and senior management. Bear in mind that the essential qualifications of a mediator may be very different from those identified for an arbitrator. What we are looking for in a mediator is someone who understands not only the legal issues, but also the environmental issues, the psychological issues, and the workplace issues. 1. Understanding the legal issues Does the neutral have to be a lawyer? This is a topic of some debate. Although occasionally employment cases may turn on a legal intricacy, that is rarely the case. However, when it comes to educating the parties concerning the risks of the judicial system, as well as the legal and evidentiary issues surrounding the case, a lawyer may have far more credibility than a non-lawyer. Again, if the parties are looking primarily for a facilitative mediator, choosing a lawyer is not necessary. 2. Understanding the environmental issues Employment disputes implicate significant intangible issues about workplace interactions, human behavior, and personal values, which are not present in many other kinds of legal disputes. Discrimination, for example, is insidious; it can permeate an organization from the top down, or bubble up from underneath the surface. Discriminatory attitudes can be subtle and are generally subtly communicated. Such attitudes are rarely overt or direct. They must usually be proven through circumstantial or statistical evidence. 3. Understanding the psychological issues Discrimination is painful. The loss of a job is traumatic. And it may cause the employee to behave in unusual ways. Perhaps her performance deteriorates, perhaps he becomes insubordinate. The trauma which both the employee and the manager suffers is hard to quantify or understand, and it can be acute. And, of course, a fear factor almost always exists on all sides. 4. Understanding the workplace issues Fear of retaliation prevails. It may be unspoken but it is almost always present. It affects witnesses in intangible ways and impacts their statements. Within the workplace, factions inevitably will form. The displaced employee will have her supporters; management will have its supporters. The result is that the workplace will be kept in turmoil. V. PREPARING FOR THE SETTLEMENT PROCESS A. Preparing yourself Know the facts of your case. If you don’t know the facts, it is either too early to mediate or more appropriate to use the mediation process to reach agreements regarding the production of certain information. Know the legal issues as well. Be prepared to discuss the merits of the case in an evaluative mediation and, regardless, understand the strengths and weaknesses of your client’s position. DO NOT BE AFRAID TO ADMIT TO THE WEAKNESSES! Your opponent knows them, and you gain credibility with both the mediator and the opposition if you acknowledge them. That does not hurt you going forward even if the case does settle. But recognizing the weaknesses may go a long way toward getting the other side to do the same. Think about the case as if you are going to trial. But do not behave in the mediation as if you are in trial. The point is to resolve the case, not to prove how difficult you will be on the witnesses at the depositions. Spend time with the other side’s witnesses, if possible, since it is a good opportunity to see them as the jury might see them. Be realistic and be sure you have spent enough time with your client talking about the actual risks of litigation. Tell your client to listen to the other side and to the mediator. And you do the same. B. Preparing your client Carefully explain the legal and factual weaknesses of your case. It is critical that your clients understand them. Never overstate the chances of winning at trial. Carefully explain the realistic calculation of damages if the plaintiff wins. Plaintiff’s counsel should avoid the temptation to overstate the damages. Talk with your client before the mediation starts about the likely terms of settlement, which may include provisions such as confidentiality, liquidated damages, tax consequences, no re-application for employment, non-derogation clause, and release language. Get an understanding as to where your client stands on these issues. Defense counsel should avoid the assumption that these types of terms are ‘standard.’ They may be acceptable to the plaintiff, but don’t assume that they are without discussion. Finally, never minimize the emotional experience that will be endured during a mediation, regardless of which side you represent. Recognize, too, the adage that a successful mediation is often one in which both parties leave feeling a little unsatisfied. Prepare yourself and your client for this predictable reaction by emphasizing the ‘spirit of compromise.’ This article is excerpted with permission from CCH’s Journal of Alternate Dispute Resolution in Employment, Fall 1999 Edition. Ms. Miller has litigated employment cases for nearly 20 years. She is the co-managing editor of The Practitioner’s Guide to COLORADO EMPLOYMENT LAW, published in December 1998, and is a principal of ‘Littleton Alternative Dispute Resolution, Ltd.’ (LADR). Ms. Miller is named in The Best Lawyers in America in the area of Labor and Employment Law. � 2000, CCH INCORPORATED. All Rights Reserved.

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