United States: Why Mediation Offers Advantages Over Litigation When It Comes To Employment Disputes

Mediation is a process that falls under the umbrella of so-called "alternative dispute resolution," along with arbitration and a few more esoteric processes. The term "alternative dispute resolution" begs the question — alternative to what? The answer is traditional litigation, typically a civil lawsuit filed in court and ultimately decided by a jury. Most people outside of lawyers in practice areas that frequently use mediation have a limited understanding of the process. If you Google the word "mediation," you'll find as many articles about meditation as mediation. This article will cover the basics of mediation, particularly in the area of employment disputes, and will provide five reasons why anyone who finds themselves in such litigation — as a plaintiff or defendant — should seriously consider mediation.

Mediation is a negotiation between two or more parties facilitated by an agreed-upon neutral third party (the mediator). This is distinguishable from arbitration, where two or more parties engage a neutral third party to hear and decide a case, essentially acting as a private judge and jury. Unlike arbitration, mediation is not binding and only results in a settlement if both parties agree; either party is free to walk away from the negotiation at any time. In the United States, mediation became popular in labor disputes in the 20th century and later became prevalent in specific legal areas such as divorce and child custody. In the past 20 years, mediation has steadily gained popularity in the civil litigation arena, which includes employment litigation.

As for process, mediation is flexible, but there are some typical practices that parties can expect. In most cases, the parties must agree to go to mediation, although some courts have their own mediation programs that are essentially mandatory. Even in those instances, however, reaching a settlement is not mandatory. Once mediation is agreed upon, the parties jointly choose a mediator. The default position in most mediations is that the parties will split the cost, although other arrangements are permissible. Once selected, the mediator typically has some pre-mediation interaction with the attorneys for the parties. It is also common practice for parties to file pre-mediation briefs before the scheduled session. A mediation session typically lasts a day or a half-day, but that may be modified by the parties. In recent years, mediation has become much more flexible. Prior to 2020, most mediations were conducted in person, but with COVID-19 restrictions, mediation adapted and remote mediation via Zoom and similar platforms are now routine.

Styles of mediation

The three primary styles of mediation are facilitative, transformative and evaluative.

Facilitative mediation is the most traditional form and involves a mediator "facilitating" negotiation between the parties by exploring the parties' interests and encouraging them to reach their own voluntary solution. Mediators using this style focus on process and avoid conveying their own opinions about the dispute.

Transformative mediation is a relative newcomer to the world of mediation. The focus of transformative mediation is to assist the parties with recognizing the interests and needs of the other parties with less emphasis on the final outcome than other forms of mediation.

Evaluative mediators are likely to express opinions about the dispute. Instead of focusing primarily on interests and process, evaluative mediators help parties assess the legal merits of their arguments and likely outcomes of litigation. Evaluative mediation is common in the legal world, and evaluative mediators are often attorneys who have expertise in the specific area applicable to the dispute, such as employment law.

The above distinctions are somewhat artificial because good mediators will employ a combination of styles in a mediation session as the needs of the parties and various issues in play dictate.

Five reasons to mediate your dispute

1. Mediation saves time. The courts are still backed up from COVID-19, with trial dates often set 12 to 18 months after a case is initially filed. That is a long time to wait for a resolution, and litigation is usually a source of stress and distraction for the parties. Add to that the fact that in most cases the initial lawsuit is just round one — let's not forget about appeals. Employment disputes, for example, can drag on for years. Moreover, witnesses and parties will find themselves burdened by demands to locate documents, respond to questions, prepare for and give testimony and other tasks that distract from business and personal obligations. Mediation typically takes one day and can resolve a case that could otherwise take years.

2. Mediation saves money. Most defense attorneys bill their clients by the hour, and the basic tasks involved in any lawsuit — drafting pleadings, discovery and motion practice — are time consuming and expensive. Many plaintiff's attorneys enter into contingency fee arrangements with their clients, meaning they only get some percentage of what they recover; of course, they hope to recover enough to compensate them adequately for the time they put into a case. Both plaintiffs and defendants may have to cover litigation expenses, such as filing fees, court reporter fees, copying costs and expert witness fees. These kinds of expenses are necessary and can be substantial. In many cases, the longer the litigation goes on and the more fees and expenses are incurred, the less likely a case is to settle. At some point, the parties pass the point of no return having invested so much in a case that neither side is willing to walk away.

Mediation, particularly when it occurs relatively early in a case, can save both sides a substantial amount of money. While the parties do have to cover the cost of mediation, this is usually not prohibitive when compared to the cost of litigating a case through trial and appeals.

3. Mediation is effective. Anyone who has ever watched television shows like Pawn Stars or Deal or No Deal is aware that most people are not very good at negotiation. Add the elements of strong emotions and confrontation that are usually present in employment litigation, and it is easy to see why the assistance of a neutral third party can be a game changer. Trained mediators are experts at getting the parties past the roadblocks to resolving their cases. According to a recent article published by the American Bar Association, a well-trained mediator can settle more than 75% of pretrial disputes, and the very best have closure rates approaching 95%. Similarly, the Equal Employment Opportunity Commission (EEOC) offers mediation of the employment disputes it handles and tracks the results. Between 2010 and 2020, the EEOC reported successful mediation closure rates between 69.4% and 79.9% of cases. If you are interested in getting out of employment litigation, it is fair to say mediation might be your best bet.

4. Mediation is flexible. The legal system offers limited remedies, while mediation permits creativity. In the majority of employment cases, there is a winner and a loser, and if the plaintiff wins, some amount of money is awarded. It is rare for an employer to be ordered to reinstate an employee and equally rare for an employee to seek such relief. By contrast, mediation is not limited. Parties, with the assistance of a mediator, may be far more creative in fashioning the terms of a settlement. There is really no limit to what the parties might agree to, but some examples include a simple apology, adoption of policies or training programs, charitable donations or a letter of recommendation. In one memorable case, an employment discrimination claim was settled in mediation for a car. This came about because the employee's biggest issue was that her car had been repossessed after she lost her job. Recognizing this as the central issue for the employee, the mediator discussed it with the employer and learned that the employer had company cars that were not being used. A transfer was arranged to resolve the lawsuit. In the end, the value of the used car was far less than what continued litigation would have cost the employer, and the settlement resolved the biggest issue for the employee. This is not an outcome that would have been possible in court.

5. Mediation allows the parties to determine the outcome. In litigation, neither party has control over outcomes; the judge and jury decide. In mediation, the parties have control and can craft a settlement for themselves. One of the most stressful aspects of litigation is the uncertainty. Attorneys on television news shows often give opinions about the likely outcomes of high-profile trials, and while it is true there is some value to an informed observer's opinion, it is impossible to predict what any jury will do with certainty. Being involved in a lawsuit is not the same as buying a lottery ticket — there is an investment of emotion and time that is difficult to quantify. Mediation allows the parties to control their destinies by agreeing to a resolution they have crafted for themselves. There is a lot of value to this level of control.

Originally published by The Business Journals.

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