Insurance is the common denominator in most commercial mediations, especially those involving personal injury. The vast majority of personal injury and professional negligence defendants are privately insured or, in the case of governmental entities and large corporations, are self-insured up to a point before insurance policies come into play. After all, without an available a source of defense funds (derived from insurance) to pay for a judgment, then many lawsuits would not exist.
Because the universe of commercial mediation is very large, the topic cannot possibly be covered in a single article, several articles or even a lengthy book. Broken down into specific subject areas, however, the topic does become somewhat more manageable. This series begins with a brief summary of the practicalities of employment mediation.
Employment Mediation Employment litigation appears to be increasing in the U.S. and with that increase a corresponding increase in employment mediation has occurred. There are several elements unique to employment disputes that must be recognized by attorneys, parties and mediators in order for mediation to successfully achieve resolution of the dispute.
A threshold question is whether the employment relationship at issue can or should be saved. If so, mediation should occur early in the dispute’s evolution before the parties’ positions become entrenched. Even if an employer decides that the employment relationship can’t be saved, a disgruntled employee can have a negative effect upon other employees both before and after termination. Of course, litigation is expensive, time consuming, and very stressful, so it is probably to the employee’s advantage to try and resolve the dispute as soon as possible.
Employment mediations generally require at least a full day. Aggrieved employees want to be heard and it is difficult to begin meaningful negotiations until parties have had a sufficient opportunity to vent to the mediator or, possibly, each other, in a joint session managed by a mediator. It is also common for employers to bring management or executive personnel to the mediation who have “historical” knowledge of the dispute. In my view these individuals, more often than not, complicate negotiations by defensive and other behaviors designed to justify past conduct. However, it is essential that employer decision makers have some psychic distance from the controversy in order to objectively assess risk.
In addition, an employer may have an insurance policy that covers some but not all employer liability. Intentional misconduct and punitive damages, however, are typically excluded from coverage. Counsel for employers should carefully assess insurance coverage issues well before mediation.
Consideration to the time allotted to employment mediations is also necessary to address customary settlement terms such as confidentiality and non-disparagement. Employees often seek employer letters of recommendation for future employment. It is not unusual for the negotiation of each of the foregoing items to take an hour or more. With civil rights claims, successful plaintiffs may be entitled to attorney’s fees. Attorney’s fee claims can and do often exceed the value of a plaintiff’s damages claim and can drive settlement negotiations. For these and other reasons, attorneys should come to mediation with draft settlement agreements and these should be exchanged between the parties as early in the process as possible.
The issues discussed above are those that most often affect successful resolution of employment disputes at mediation. However, each case is different and attorneys and mediators must be attentive to the differences in order to effectively negotiate employment mediations.
Gregg Bertram M.A., J.D., LL.M. is the President and Founder of Seattle-based Pacific ADR Consulting. He is one of the most experienced and successful mediators in the U.S. Gregg and Pacific ADR's panelists mediate and/or arbitrate in every area of civil litigation at the highest professional level.