NAM PERSPECTIVE

March, 2016

HOW TO USE MEDIATION TO SUCCESSFULLY RESOLVE EMOTIONAL EMPLOYMENT DISPUTES

By: Erica B. Garay, Esq.

Erica Garay, Esq. Mediation is uniquely suited to resolving employment claims, whether they are based upon a “wrongful termination,” discrimination, violation of post-employment restrictive covenants or misuse of trade secrets or confidential information. Importantly, mediation gives the parties control over the outcome and avoids the uncertainties of litigation.

The reason mediation can be helpful in resolving these disputes (and at an early stage) is that the parties themselves are very familiar with the facts, making discovery less necessary. For example, in a case involving a discharge or issues of discrimination, both the employer and employee know what led up to the event that is central to the plaintiff’s claim. In a restrictive covenant case, the plaintiff knows the harm it suffered, what customers may have been contacted or business lost, and even what confidential information was taken; the defendant knows what conduct took place that is being challenged.

Employment cases are usually very emotional; the wronged party feels betrayed. If confidential information was taken, the aggrieved party is surprised by the conduct it believes was dishonest. The employee is hurt that he/she lost a job. In discrimination and harassment cases, the defendant is equally upset at the charges. Mediation – rather than litigation – is uniquely suited to help the parties by giving them an opportunity to vent about what transpired. The ability to speak about the alleged misconduct allows the parties to concentrate on a resolution. Most cases settle, so why not consider an early mediation? If a party needs discovery – ask the mediator. It is fairly common to obtain an “exchange of information” before the mediation commences. If counsel needs information about a party’s claimed damages, such can be “exchanged” in advance. Parties can even agree to mediate after a particular deposition or an interview is conducted or after expert reports are exchanged.

Most cases settle on similar terms: In a discrimination or “wrongful termination” case, the settlement usually looks toward what compensation was lost and whether there were any “special damages” (such as medical). In a trade secret/restrictive covenant case, the settlement often will include a return of any company information that was taken by the employee, a protocol to return electronically stored information (ESI) and a list of persons to whom such was given; a list of customers that can or cannot be solicited and/or how accounts or business will be shared; a payment of damages and/or an agreement on damages if there is a future violation. Whether the parties seek to enter into a consent decree or a settlement agreement is a topic for discussion.

An important aspect of mediation is that remedies that are unavailable to a court can be utilized in resolving a claim. For example, parties can re-write their agreements (such as narrowing a restrictive covenant) or a reference or assistance in a job search can be provided to the former employee. The focus of mediation is to address the interests of the parties so that common ground can be found. The parties can stipulate as to what customers the former employee will stay away from or how to share revenue or profits. Such relief is unavailable in the judicial context.

Importantly, mediation is private and confidential. Sensitive facts of the case (including information about lost profits or trade secrets) remain confidential and out of the public court room and court files. Relationships can be salvaged, by fashioning a settlement without the involvement of customers or clientele. After all, no party wants the customers to be in the middle of a dispute.

The use of a mediator can help parties and their counsel analyze the strengths and weaknesses of a case or defenses. This is important as many attorneys find that they “fall in love” with their cases and often forget that “having a case” is different than proving it.

The parties, with the assistance of counsel, can focus their energies on how to move past the “wrong” that is being challenged, how to address the perceived harm, and how to fashion a solution that is acceptable to all parties. Mediation allows the parties to avoid the high cost of litigation and permits them to get to the “endgame” faster, without risking an uncertain outcome. Mediation need not be a last resort, but rather, can be a tool to be used early on in the process. Employment litigation is very well suited for mediation.

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Erica B. Garay, Esq., is a member of NAM’s (National Arbitration and Mediation) Hearing Officer Panel and is available throughout the New York Metro area for arbitrations and mediations. Ms. Garay is Chair of the Alternative Dispute Section of the Nassau County Bar Association and an experienced commercial litigator.

Click here to view Erica Garay's resume.



For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at jsilvey@namadr.com or direct dial telephone at 516-941-3228.
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