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Contributors: Miriam F. Clark, Ritz Clark & Ben-Asher Todd H. Girshon, Jackson Lewis Dina R. Jansenson JAMS *Michael E. Kreitman, Macy’s Law, not pictured
We recently assembled a panel of professionals for a LexisNexis® webinar who have extensive experience mediating employment claims, including allegations of race or gender discrimination, sexual harassment, and wage-and-hour disputes.
The speakers were: Michael E. Kreitman, senior counsel in Macy’s Law Department, who served as moderator; Plaintiff Attorney Miriam F. Clark, Ritz Clark & Ben-Asher LLP; Defense Attorney Todd H. Girshon, partner at Jackson Lewis; and Dina R. Jansenson, senior mediator and arbitrator at JAMS.
In Part I of our webinar report, we discussed preparing for mediation. In this article, we pick up the conversation where the panelists discuss how to handle the mediation itself. [Click here to read Part 1.]
The speakers discussed getting off on the right foot. JAMS mediator Jansenson is a “huge believer in joint meetings,” saying it’s not a matter of whether to have them but who should attend. In addition to the attorneys, should clients themselves participate? She says the advantage to having everyone in the room is that it is a tremendous opportunity to exchange information in an efficient way. “It can be helpful to have clients hear and participate in the discussion,” she said. Jansenson gave an example of a case involving a joint venture dispute. After a 12-hour session with everyone engaged, she said, not only did they resolve the issue but came away with a new joint venture agreement.
Plaintiff attorney Clark said these initial joint open meetings are “in most cases extremely useful.” She said it gives her client a chance to tell her story sometimes for the first time. It’s also good for the other side to see that her client is articulate and not afraid to speak up—“that she will be a strong witness” should the case go to trial.
From his point of view as defense counsel, Girshon said these joint caucuses present a good opportunity to set the tone and to have the parties all look each other in the eye. He said it’s not an opportunity to deliver an “opening statement,” but to give more of a “kumbaya speech” that signals a willingness to work together to reach a resolution. When the plaintiff says a few words or participates in the presentation of her case, “we get to assess the plaintiff as a witness at trial, so it’s important to understand that.” He added that he may even realize, based on who is in the room, that there is someone, like a spouse, who is driving the case behind the scenes. The caucus can “help give them assurance we’re trying to work it out.” He said too many joint caucuses are being waived. But if a mediator recommends that such a meeting will set back settlement discussion “you have to give serious thought to that.”
Kreitman said negotiating truly is an art and agreed that these joint meetings can set a positive tone, especially if the parties can sit across the table in a non-adversarial context, perhaps even with an HR person in attendance. It's an opportunity to assess one another and “communicate messages unconstrained by the rules of litigation.” He added that “there has to be a compelling reason if the mediator wants to pass on a joint meeting. Maybe he won’t have the patience.”
At this point, when the parties meet separately with the mediator, Jansenson said it is important for the parties to realize that both sides will start at a point that is either more or less than they are willing to accept. “The first numbers will be thrown away,” she said, adding that they are “used to send signals.” She cautions parties not to be upset by the opening numbers, and know much back and forth will follow.
Clark said that she educates her clients about what they can expect and what they can expect to get. By the time we arrive at mediation “I have worked out a number with them. I know their grand-slam number, and I’ve told them about the case weakness and possible appeals.” Clark said she works out with her client the various values of different aspects of her claim, so they are prepared when the mediator presents a number.
Girshon said—assuming the joint caucus went smoothly—it is typically in the first session that he and his client can plainly speak with the mediator about what they think the outcome should be.
“It’s cathartic to talk openly about what we heard in the joint session and about the number they came up with. Whatever the number is, you want to have a rationale for how they arrived at the numbers.
Defendants don’t like it when a plaintiff puts a large number on the table, even if they may be simply signaling. When a large number comes out of thin air and plaintiff feels they are looking for a recovery without basis in reality, it’s troubling,” Girshon said. “We ask the mediator ‘how did they reach the number?’ Sometimes we ask the mediator to ask for that calculation.” We consider things like how long the plaintiff was out of work, whether they receive unemployment compensation, whether they went for treatment, whether attorney fees can be as high as they have calculated. If we don’t like the number, we come back with a low number, but it must be based on reality.” For example, he said, he may offer twice the severance than was originally offered. “When the defense puts a number out on the table it’s real money that’s going to be paid. It’s not imaginary.”
JAMS’ Jansenson said the parties “should expect that the mediator may not rush into the money discussion right off the bat.” She said she does some coaching with each side about the process. “I lay out the strengths and concerns, and tell them they must be prepared for risk assessment coming their way.” As for the numbers, Jansenson said her general recommendation is this: “Do what you need to do in the beginning. Provide rationality but show flexibility. Signal flexibility.”
Clark said sharing numbers is tricky. “You know your bottom line so you want to convey that, but you don’t want to convey more flexibility than you’ve got.” She takes the individual components of the claim—such as back pay, insurance and compensation for emotional distress. “I try to say which of those has flexibility. That way each aspect is grounded, but we set limits by category.” A client may be firm on back pay but flexible on distress claims, she said.
Girshon stressed the need for creativity. “You have to listen throughout the day and come up with creative solutions. Money is a big part of it. But there are things important to the plaintiff that may not cost us much. Like a letter of reference that goes beyond the company’s neutral recommendation policy. Maybe we can offer some money toward COBRA so they remain on health insurance. It may be important to them, but not as expensive to us. Also, it shows some sensitivity and demonstrates that we’re here to work with you. We make it clear we are here to settle the case and willing to spend all day to do it.”
Macy’s attorney Kreitman shared an instance where a mediator pushed for a bottom line number. Then, after sharing it, the mediator came back and said “we have a deal with that number.” This is not what he intended the mediator to do with the figure. He asked Jansenson how she would have responded to being pressed for a number.
“I would tell them to go back to Mediation School 101,” she said. “The mediator’s job is to get to a resolution with forward momentum, and not asking the parties prematurely for a bottom line. Don’t fall for it.”
Clark agreed. “I would not give a bottom line because it may change as the process goes on. It may go down or up. I must protect the client’s ability to modulate as the mediation moves forward,” she said.
Kreitman asked the panel what they disclose when not all discovery is out there yet, and not all the facts are in their favor. “Some disclosure is better than no disclosure,” he said, “but what do you disclose?”
Girshon stressed the need to work this out with the client first. “While the mediator wants a settlement, we want a resolution that works for us. Facts may come up during the course of the day. We have to decide what facts we leak out to the mediator or whether to take factual issues head on. If the mediator says you won’t get a summary judgment, then you may want to accept that and for purposes of mediation concede that. The mediator will hold some things confidential, but you might say ‘we have a good case for trial’ then turn facts into positive.”
Kreitman said, as in-house counsel, “it is important that a mediator finds me credible. I won’t argue about facts that aren’t great because I lose credibility with the mediator. I want the mediator to be my ally—to help me get the best outcome . . . . Each side needs credibility with the mediator, and not try to discount or underplay unfavorable facts.”
Clark said you “must be prepared for how to handle the bad facts of the case. I would be prepared to have an explanation—to have something so you don’t appear to be ignoring the bad facts or that you’re dodging them.”
“Credibility is huge,” Jansenson said. “Don’t try to totally cover up bad facts. You’re not doing yourself any good.”
Kreitman asked the panel about getting the parties unstuck when they seem to have reached a standoff.
Jansenson said one technique is “bracketing,” in which both parties are asked to move away from their position and in the direction of resolution. For example, if the plaintiff wants $700,000 and the defense won’t go above $100,000, use the bracketing technique. The plaintiff may come down to $550,000 if the defense comes up to six figures. This way, Jansenson said, “You may be signaling a willingness to get to a resolution,” or you find you can’t make progress.
Clark said hallway conversations, while useful, need to be done in a way that preserves client trust. You don’t want them to think there is “something going on.” But she said, it allows the attorneys to “skip extraneous posturing.” Girshon agreed. Sometimes hallway conversation outside the mediation room is productive, he said.
“What about keeping mediation open beyond the initial session?” Kreitman asked.
Girshon said he blocks the entire day on his calendar. “The hardest working attorneys sometimes get the best things for the client,” he said. “They may be able to get stuff in a settlement if you go later than you would have in earlier hours. We like to manage the game clock in a way that works for us. Once the other side walks out you won’t get a deal. Make it clear to the client that we have to stick it out. But if I see the other side needs more time, but you’re up against a holiday, like Thanksgiving, then leave the mediation open for a week or a day to give both sides a breather and time to think about it.”
Jansenson said “a mediator’s proposal should not be overly used by mediators and not come too early in the process. It should be a useful tool, but only after some negotiating.”
When the time comes, she said, “I write my proposal, hand it to the parties and ask them to write yes or no. They give them back to me privately so I protect the party that says yes to my proposal.”
The panel next explored what a settlement looks like, discussing term sheets, enforceability, settlement agreements, apportionment and taxability, and non-economic terms.
Jansenson said she wants to leave at the end of the day with a term sheet and final agreement. Many issues will come up, but she said to try to address them during the mediation.
“We want a signed piece of paper,” Girshon said. He said he likes to bring a one-page term sheet with blank spaces to fill in details. “At minimum we walk out with something already signed.”
“There is a growing trend to finalize a full-blown settlement. I am finding it more productive to do this. Bring laptops, pull up the agreement, make tweaks, print and sign the agreement. At times it does add time at the mediation and it may not always be possible to have everyone sign.”
“I want a signed agreement,” Clark said. “It may not be possible. I may just get a term sheet and the term sheet may not be binding without full agreement.”
“Welcome to my life!” Jansenson said. “This is what many mediations are all about. Mediators are there to help the clients sort out what the principles are and how a resolution can be reached that won’t go against those principles.”
She added that she tries to counsel the parties that mediation is a “forward-looking process.” She asks them, “How do you want your life to be in five years? Focus on the future and not the past.”
Good advice in general!
This article was edited for LexisNexis by Tom Hagy, managing director of HB Litigation Conferences and former publisher of Mealey’s® Litigation Reports.