Preparing for a Successful Outcome

     Mediation hearings are not really the best place for surprises.  Recently, I was mediating what appeared to be a garden variety single plaintiff wage and hour case.  The Defense lawyers, representing a small business, had carefully analyzed the damage exposure to their client and given him advice on the parameters of the value of the case.  The parties had exchanged briefs and communicated their opening offers before the hearing.  The Defense arrived committed to resolving the case, at an uncomfortably high, but affordable value if necessary. 
     Unfortunately, as I got to know the Plaintiff, she revealed an incident of violence in the workplace which, if true, had the potential of completely changing the value of the case.  The defendants were caught unawares and the negotiation was severely hampered, and ultimately unsuccessful given that this allegation had not been verified or even made a part of the pleadings by the time of the mediation hearing.  There had been no discovery--formal or informal and the Defendants had no way of evaluating the veracity of a claim that was made for the first time during the first hour of a 1/2 day mediation hearing.
     In this instance, the Plaintiff's attorney was also unaware of the new issue, so he could not have raised it sooner.  Still, in negotiation, being prepared and preparing your client and your adversary, will always have a better chance of success than surprising the lawyers and parties with new facts and allegations at the time of the hearing. 

That's my View from the Middle of the Road!

Re-Framing to Present the First Offer in a Better Light

    Though sophisticated parties are often frustrated by the length of time it takes to get to the negotiation of numbers in a mediation, the time is always well spent.  During that first hour or two (sometimes many more), the mediator can really listen to the parties and then formulate a plan for how best to approach the delicate dance that is inevitably to follow. 
     This week, I mediated a sad employment situation where an employee was terminated by her Supervisor, 10 years her junior, without a real explanation or what most employees would consider to be "good cause".  The problem is that here in California, an employer doesn't need good cause to terminate an employee who serves "at will". 
     Still, it was clear to me that the owners of the medical practice felt awful about the way this termination had occurred.  It was simply a reaction by a new Supervisor to a seemingly insubordinate, though much more experienced employee.  When she challenged him in the presence of other co-workers and a client, he simply couldn't tolerate her and exercised his broad managerial discretion in firing her on the very next day.  I am reminded of the situations which I observe increasingly where counsel on the one side have 3-5 years experience (making them under 30 years old) and their adversaries have 30 or more years experience.  It's a challenge to assert the authority without the experience in those circumstances, too.  What she saw as retaliation for whistleblowing, he saw as firing an at will employee for cause.
     The tool I engaged in order to begin the negotiation on that case was to articulate the employer's remorse that this loyal and competent employee had been fired without any severance or explanation (without admitting any liability for retaliatory misconduct, as she had alleged).  I did that by framing the first offer as a severance offer:  based upon her years of service, they began with an offer that was equivalent to a one month's severance pay.  Ultimately, the case settled on a mediator's proposal of several times that amount, but by carefully re-framing the initial offer from what appeared to be a "nuisance value" (less than $5,000) to a calculated offer based upon two weeks per year of service (often considered a fair severance package pre-termination), I was able to drive home the legitimate feelings behind the offer in a way that the Plaintiff could, for the first time in the life of the case, appreciate and ultimately accept.
     The Employers too, felt better about paying a "severance" than they would have had I couched it as a penalty or actual damages for wrongful termination.  While they believed the termination was wrongful, they also understood that the way this employee was terminated (the day after she had raised legitimate concerns about overtime pay) was problematic.  Settlement was the best solution.  Re-framing to hang the whole incident neatly on a wall, behind both parties, was the best way to conclude the dispute and look forward to using more caution in managing other employees in the future.

Ask the Hard Questions before the Negotiation Begins

     Not all lawsuits are motivated by a desire to obtain monetary damages from a party who has aggrieved another.  There are, in fact, a myriad of reasons why someone may want to sue another party:  to bring a company who they believe has wronged them down, to shame another person, to vindicate one's rights,  to be heard, to prove to himself and/or his spouse or the world that he was right in standing up on his own behalf, or even to show someone their personal strength, intelligence and experience in a way that was not previously recognized by the other.  It's hard to predict, because by the time a matter gets to mediation, it is typically framed in conventional pleadings covering a series of causes of action which are taken, element by element, from Forms of Pleading and Practice--not revealing the true motivation for bringing the suit. 

     Most Judges will agree that once a jury gets a case, they make decisions not based upon law, but upon personality: who do they like and who do they believe?  The legal questions are all decided before trial.  The jury is left only to decide matters of fact, based upon their own determination on credibility, and often, likability.
  
     The motivation for bringing a legal action, will almost always reveal critical keys for unlocking it.  If, for example, the aggrieved party is acting because he wants to prove that he was right, sometimes money alone can't do that:  an acknowledgement, public exposure, an agreement to take steps to prevent such misconduct in the future may be necessary.  If, on the other hand, the lawyers have become passionately embroiled in a contest of strength and skill between them, sometimes a few rounds of litigation, or even a concession or two may be what's needed to empower the advocate to recommend settling the lawsuit at any amount.

     The cautious mediator will give voice to every participant's true objectives by asking them probing questions early on which are designed to dig deeper than the initial demands or offers and to uncover the true motivations for moving forward or pushing back.  It is only after this initial sensitive work is done that the process of negotiation can begin in earnest.

In Negotiation as in LIfe, Timing is Everything

In the last couple of weeks, I've heard two mediations which were brought to me before a lawsuit had been filed, and two that were within a month of trial.  Which is the better time to settle the lawsuit? 
      In one case, a tenant was seeking reimbursement for pre-paid rents and security deposits after being evicted when the house was sold in foreclosure during the pendency of their lease.  The trouble was that the lawyer for the sold out owner/landlord had done a lot of legal research that she had not shared with the tenants, indicating that they had a right to stay in the leasehold based upon California law protecting tenants in just this type of situation following the housing bust beginning in 2008.  Though they were required to attempt mediation under the lease, the lack of information made this mediation too early to be effective.  Still, the lawyers and their clients knew a lot more about one another's claims and perspective when they left than when they arrived.  Not a wasted effort:  just a step towards meaningful negotiation.
     In another case, for wrongful termination in retaliation for whistleblowing, the parties are on the verge of spending a week in a binding arbitration before a retired Judge.  To date, both parties have held off on incurring the expense of substantial formal discovery, given the typical limits imposed in an arbitration (usually one deposition per side and one set of Interrogatories and Requests for Documents).  As a consequence, there were lots of witnesses and theories exposed in this mediation that had not been considered before by the lawyers involved in the case.  Both of them were caused to have difficult conversations with their respective clients, and re-evaluate their positions dramatically as the result of this safe and confidential conversation through an unbiased intermediary.
     In both instances, though at opposite ends of the life of the lawsuit, mediation was useful and informative in getting to the ultimate resolution of the lawsuit.   Maybe it is time to expand the objectives of a mediation beyond simply "settling a case".  Here, both sides found a great deal of value in coming together in a non-confrontational way through an unbiased intermediary to explore the issues, the evidence and the contours of the value of the cases (in their own minds and their opposing parties').  Each side will now have to consider the value of further litigation to find out whether it is worth the risk and expense to move forward or whether there is some region where the case can be settled satisfactorily without testing these boundaries.  I have my predictions....