As wage and hour claims explode over the legal landscape, some federal court judges are automatically referring such cases to court-annexed mediation. Often, the defendants are small employers with few assets who are overwhelmed by the costly demands for back wages, liquidated damages, statutory penalties and attorney fees. Not surprisingly, defending a wage and hour lawsuit can produce an existential crisis that sharply impedes settlement discussions at mediation.
Some small employers, in order to navigate their harsh new reality and reduce their potential liability, embrace suspect defenses. An evaluative mediator must address those mistaken defenses if only to redirect the employer to a more useful cost-benefit analysis and discussion of self-interest. Indeed, a mediator should present the following hard truths, which can be confirmed or challenged by counsel, as a predicate to a successful wage and hour mediation.
