Mediation “Know-How”

A Guide to Improving Advocacy in Employment Mediation

By Ruth V. Glick*

1. Know the Mediation Process a. Understand how it works b. Be amenable to it by changing your approach

2. Know the Right Timing to Hold the Mediation

a. Have enough information available for valuation b. Or use it to circumvent lengthy discovery

3. Know your Mediator a. Make sure it is someone who can command trust, be knowledgeable about

the subject matter and can communicate effectively. b. Let the mediator manage the process

4. Know your Client a. Make sure your client knows what to expect and how to participate b. Showcase your client as a good witness c. Be sure to identify and involve the real decision maker d. Encourage your client to speak to the mediator

5. Know your Strategy a. Use pre-hearing contact with mediator effectively b. Understand the negotiating process and how to use it to your advantage

6. Know the Strengths and Weaknesses of your Case

a. Write a strong, succinct brief that effectively communicates your position b. Be aware of the weaknesses of your case c. Be prepared to re-evaluate your position during the mediation process

7. Know your Opponent a. Comprehend the case from the opponent’s point of view b. Understand what the conflict is really about

8. Know how to Use a Joint Session Effectively

a. Communicate you are there to seek resolution b. Observe and listen to your opponents

9. Know How to Negotiate

a. Don’t get stuck in minor bidding wars b. Always treat your opponent with respect

10. Know about Options other than Money a. Consider non-economic solutions like apology, or job recommendation b. Be prepared to think creatively

11. Know the Barriers to Settlement a. Inform the mediator to enable her to diffuse them b. Encourage problem solving, rather than litigious conduct

12. Know to Memorialize an Agreement

a. Draft a memorandum of understanding at the conclusion of the mediation b. Or, have a generic settlement agreement available at the mediation c. Have parties sign the understanding as well as final settlement agreement

© Ruth V. Glick 2018 *Ruth V Glick is an experienced employment and commercial mediator and arbitrator in the San Francisco Bay Area. She is on the Large and Complex Case, ICDR, national commercial and labor and employment panels of the American Arbitration Association. For more information see rvg@ruthvglick.com.

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10 Tips for Successful Mediation in Employment Litigation- from the Mediator’s Perspective

By Frank Burke

1. Create an effective and comprehensive mediation

memorandum. Write persuasively and include a summary of the claims, and the facts and law relating to the claims, including liability, causation, damages and collectability, including relevant timelines. Important documents and e-mails should be included or available, especially when employment contracts or policies may be dispositive. Describe the facts underlying the discrimination, retaliation or sexual harassment or underpayment of wages or breaks. If the stated purpose for a termination is alleged to be pretextual, discuss the evidence. Do not overlook the persuasive impact of charts, graphics and other visual aids to summarize data trends or organizational relationships that might otherwise take significant time to explain orally. Explain the alleged damages and how they are calculated. In a wage hour case this should include explanations of how hours, rates, overtime, meal and rest breaks are calculated and how alleged errors occurred. In discrimination or retaliation cases, explain how the back and front pay has been calculated, loss of benefits, and discuss mitigation issues. Discuss and factually support or challenge emotional distress or punitive damages. In lost commission, stock option or deferred compensation cases, be prepared to discuss the sales cycle, vesting periods, and the contractual protections written into the employment agreements or employment policies. If attorneys’ fees or interest are sought, explain the legal basis and how they are calculated, including hours expended and hourly rates. All prior settlement demands or offers should be disclosed. 2. Make the most of your pre-hearing conference with the

mediator. The pre-hearing conference should be scheduled for a time after the memoranda have been exchanged, so you do not have to waste valuable time with the mediator summarizing what is in the memo. Use your time to tell the mediator about any backstories not covered in the memos, obstacles to settlement, issues you perceive with your client and with the opposing party, and how a settlement can be achieved. This is a good time to address whether the mediation will only be about money, or whether other interests are involved, and whether business

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solutions or non-monetary considerations may play a role. Tell the mediator the name of your client or representative or adjustor who will be present with full settlement authority. This is the time to discuss whether you think a joint session makes sense, and if so, what should be covered. This might be your best opportunity to make a direct presentation to the other side, but it is also your opponent’s best opportunity. An overly aggressive presentation could easily backfire because of the personal issues involved in employment cases. A civil, polite approach is advisable. 3. Prepare yourself and your client for more effective oral

presentations in mediation. The nature of employment litigation makes it tailor made for client presentations in a joint session or a private caucus on the relevant facts. The clients/client representatives can best describe the interpersonal relations that preceded the litigation, and how they were impacted, with a level of granularity and nuance and emotional detail that cannot be matched by their lawyers. When lawyers substitute themselves in that role, they tend to overplay the rhetoric and repeat what they have written in their memoranda. The lawyer’s role should focus on the application of legal principles to the facts presented by the client/client representative, and to help shape the overall message to be presented or provided to the other side. Charts, graphics or visual aids can be highly effective in such a presentation. 4. Deal with emotion in the mediation. Emotions are to be expected and anticipated and natural in employment litigation, given the subject matter. Many view it as a positive factor that the participants have a forum to tell their story short of a jury trial, and that emotional catharsis may be a beneficial event for the participants. So, the emotions can easily come forth, and it makes little sense for anyone to try to bottle them up. Skilled mediators are trained to engage in active, empathic listening with all parties, emotional or not. However, they are also trained, and duty bound to remain neutral and not to become advocates for one side or the other, and it may become necessary under some circumstances to have a discussion about with the client if that is misunderstood. Depending on the circumstances of the case, the parties may wish to look for an opportunity in the mediation for the participants to have a face to face meeting to explain their feelings and for one or both, as appropriate, to offer an apology.

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5. Explore your best, worst and most likely alternatives to a negotiated agreement. It is important that lawyers and clients come to a mediation with realistic expectations about what will occur and that achieving a settlement usually requires compromise. This requires advance consultation, preparation and planning. The concept of “best alternative to a negotiated agreement” or “BATNA” was first addressed in the landmark book Getting to Yes. It is harder to apply BATNA in litigation where walking away and engaging in another deal is not an option. In litigation, it is best used in conjunction with the worst and most likely verdict results as a vehicle to analyze risk scenarios with the client, to gauge the likely top end and bottom end results as well as the most likely result. Some use decision tree analysis, jury verdict research or mock juries, and others a less formal approach. This should be done prior to the mediation to avoid being forced to make important settlement decisions on the fly. Each side should develop its own likely verdict target number and range based on its risk analysis and its own walk-away number and seek to understand and anticipate its opponent’s likely verdict target number and range and walk-away number.

Bargaining Ranges

Defendant’s Opening Offer Plaintiff’s

Walk Away Number

Defendant’s Walk Away

Number Plaintiff’s Opening Offer

Each side’s bargaining range is bounded by its opening offer and its walk away number. The overlap is the zone of possible agreement (“ZOPA”) which is bounded on the top end by the defendant’s “reservation point” or “walk away number”, and on the bottom end by the plaintiff’s “reservation point” or “walk away number”. In this analysis, each party’s “walk-away” number is a private,

Zone of Possible Agreement

Defendant’s Bargaining Range

Plaintiff’s Bargaining Range

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bona fide number, not a revealed litigation or negotiating position. Due to imperfect information, the ZOPA is not ascertainable at the outset of a negotiation, but it is well worth modeling through decision trees or varying risk scenarios and prior discussions with opposing counsel, all of which can be impacted by fact development, witness strengths and weaknesses, motion practice and court rulings, the venue and likely jury panel and other factors. As offers are exchanged during the mediation, the ZOPA will become clearer to the parties. If plaintiff’s walk away number is higher than defendant’s walk away number, a negative bargaining range is created. Unless one or both parties recalibrate during the mediation based on all the information they are receiving and re-thinking the risk factors, especially including the risk of losing the case, in such a case there will not be a settlement.

Bargaining Gap .

Defendant’s Opening Offer Defendant’s Walk Away

Number

Plaintiff’s Walk Away Number

Plaintiff’s Opening Offer

6. Set the stage with your opening offer. The opening offer must be evaluated in terms of the perceived most likely verdict result and range and the perceived ZOPA based on the perceived party walk away numbers. The opening offer should be selected as part of the overall settlement strategy and potential settlement moves and concessions. It should

Negative Bargaining Range

Defendant’s Bargaining Range

Plaintiff’s Bargaining Range

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be accompanied by a rationale, supported by the party’s assessment of the case and each parties’ strengths and weaknesses on the merits and damages and collectability, so the opposition is not left guessing. There is no right or wrong strategy; but one should be planned based on the party’s objectives, all the factors that may affect its desire to settle and what it may perceive as a fair result. Business negotiators argue in favor of the “anchoring effect” of an opening offer, but they are often discussing transactions where either side is free to walk away. In litigation the opening offer can send a message, good or bad, with a weaker anchoring effect. The opening offer must also take into account prior offers. It is not advisable to backpedal from prior offers, as the opposing party is likely to view that as negotiating in bad faith.

Opening Offer

Insult Zone

Aggressive Zone

Reasonable Zone

Zone of Possible

Agreement

Reasonable Zone

Aggressive Zone

Insult Zone

A reasonable opening settlement offer would be what each party sees as the likely plaintiff verdict and range, taking into account all the risk factors. If the offer and counter-offer both fall into the ZOPA, the parties are already close and past each other’s primary resistance points and settlement should be very achievable in a few moves. If one or both offers fall outside would be the perceived ZOPA, but the offer is close enough to be perceived as reasonable and that is met with a reasonable counter-offer, both sides can see the likely settlement range fairly quickly. Each party must move past the other’s primary resistance point to get into the ZOPA, which may take more moves, but once both are in the ZOPA the mid-point can be established and achieved. A plaintiff aggressive offer would be in the high to very high end of its likely verdict range, while a defendant aggressive offer would be in the low to very low end of the likely plaintiff verdict range. A more aggressive opening offer would be even further outside the ZOPA. This range is sometimes referred to as the credible range, in that each party’s view of the facts, law and damage calculations can support its offer, but it is not so far outside to be perceived as insulting. The other side will often view the aggressive offer as unreasonable, but not so unreasonable to cause bargaining to cease. The party making an extreme aggressive offer must closely look at the response and be ready to move or solidify depending on the response. A party making an extreme aggressive offer must anticipate that it may become necessary to make

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substantial settlement concessions to achieve a settlement and should have a credible plan for making such moves. An insulting opening offer would be “over the top” or “pie in the sky” on the plaintiff side, and a waiver of costs or de minimis offer on the defense side in relation to the amount in controversy. It can be very destructive, possibly causing bargaining to cease, possibly provoking an equally insulting opening counter-offer from the other side. This can easily create an unbridgeable divide which will require either very large moves or may well lead to early impasse and termination of the mediation or walk-out. 7. Plan your settlement moves in mediation. The “middle rounds” are the heart of the mediation process, which often consume the most time and where most of the movement usually occurs. Each party’s second move is often its most important in signaling its intentions, particularly if its opening offer was very aggressive. It is important to have a negotiation plan regarding the end goal, the size of the concessions and what they are communicating. The first few moves are the most important in sending strategic signals to the opposing party. Especially in the first few moves, there is extensive information exchange, primarily through the mediator, of each party’s positions on the merits and damages, emphasizing the strengths of its position and the weaknesses of its opponent’s position. The mediator is working to keep the momentum moving, and the counter-offers flowing. An early stall, where one party refuses to counter unless the other party makes a double or even triple move, can lead to the dreaded response “I’m not going to bid against myself” and a potential impasse and breakdown of the mediation. To deal with these permutations, it is advisable for counsel to plan multiple settlement moves ahead through the mediation, either repetitive small or moderate moves, or whether and when to make large conciliatory moves, and possible counter-moves in response to their opponent’s moves. In this way the moves can be strategic and not emotionally driven. At the same time, interest-based bargaining should be factored in, enabling business solutions or non-monetary consideration. 8. Work with the mediator to avoid or break impasse. The best way around impasse is to avoid it in the first place by positive attitude, strategic thinking and moves, making conciliatory moves at the right moment,

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including interests-based solutions, and avoiding emotional, knee-jerk responses to moves by the opposition. As impasse approaches or is upon you, the likely ZOPA may become clearer, and may be higher or lower than had been anticipated, or it may be the same but still not within reach of the parties’ settlement positions. Whatever the situation, impasse should cause each party to re-evaluate the strengths and weaknesses of its position, the risks of achieving the litigation result it seeks, the costs of pursuing or defending the claims, the impact of fee shifting, and the benefits of settling the matter and getting it behind the party. This is a good time to seek the mediator’s insights as the “angel of reality” to provide a third-party perspective on these issues, to help articulate the positions articulated by the opposition with its permission, and to discuss comparable discounts or results in similar matters. Upon re-evaluation, the parties may decide to make additional moves, may suggest conditional bracketed moves where both move in unison, which may result in several rounds of suggestions of the brackets, or may ask the mediator to suggest brackets. There are many other possible options such as late joint sessions, lawyer to lawyer or client to client or expert to expert discussions. In the case of a strong deadlock, a cessation may be advisable to allow a cooling off period which can cause re-thinking. If all else fails, the parties may request a mediator’s proposal which may either settle the case or scuttle the mediation. If the mediator’s proposal is not accepted, it is sometimes used by the parties as a possible springboard for further proposals. 9. Close the deal. After the parties have been productively exchanging offers including monetary and interest-based positions, they will often reach a point where they sense that a settlement might be achievable but may take additional moves to reach closure. While it is impossible to generalize, often parties will make smaller moves that are purely reciprocal to try to reach a perceived fair mid-point. Sometimes they may offer to split the difference. Other times they may ask the mediator to suggest conditional bracketed moves, or to suggest that conditionally one party would move to the mid-point if the other will move to the mid-point. This is less of a mediator’s proposal and more of a party-determined number. One party or the other or both may find that they are at or near their “reservation point” or “walk away” number but here is still a gap between the parties’ positions. It is also possible that one party will reveal that it has little bargaining room left or has reached its final number. This gap can create a negative bargaining range. It is often the case that parties in such a situation do find a way

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to bridge such a gap. They re-evaluate all the risk factors in the case, costs of proceeding and benefits of finality and closure. This may cause one or both of the parties to recalibrate and move their reservation point(s). Another common method is for the parties to “enlarge the pie” through integrative bargaining, by exploring additional interests and issues that can be exchanged to create value to bridge the gap. The parties may exchange new proposals, or one party’s last and final proposal may be accepted. That may occur after adjournment through follow up calls where the parties have had time to reflect on the totality of the circumstances. The risks and consequences of losing on motion or at trial can be sobering. This gap closing process must be driven by strategy and the clients’ best interests, and lawyers and the clients should not be overwhelmed by their egos. When the heat of the moment passes, most settling parties recognize that settlement was the best outcome in an uncertain litigation setting. Once a settlement is reached, it is imperative to memorialize it in a written agreement or memorandum of understanding or a generic settlement agreement, signed by the parties before the parties leave the mediation. This can be followed later by a more formal settlement agreement. The writing should specify that it is enforceable and admissible in court and in California is binding under CCP 664.6. This process can take an hour or more, but is extremely beneficial because the alternative, creating and signing the document later, may lead to negotiation over additional deal points or lawyer inserted clauses that can cause a breakdown. 10. Take into account non-monetary considerations: apology, reference letter, reinstatement. As with any business relationship, the parties in employment litigation may be asked for non-monetary interest-based concessions. The most common are an apology, a positive or neutral reference letter, or reinstatement. These would be typically requested of the employer, and should be given consideration, as they may be beneficial in reducing the emotion level of the mediation and help produce a durable settlement. There may be opportunities for creative solutions to enable the employee to be re-employed in some capacity or receive an extension of the termination date, to enable the vesting of benefits or continuation of healthcare, or to enable the employee to secure alternative employment that would be comparable to their prior position. Other possibilities include tuition payments, training or retraining, outplacement assistance, and company stock buy-back.

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Recommended Reading: Representing Clients in Mediation, Spencer Punnett, American Bar Association 2013. Mediating Legal Disputes, Dwight Golann, American Bar Association, 2009. Mediation: The Art of Facilitating Settlement, Straus Institute for Dispute Resolution, Pepperdine University School of Law, 1993-2009 © 2018 Frank Burke All rights reserved. Frank Burke is a panel member of ADR Services, Inc. handling mediation and arbitration matters in its San Francisco, San Jose and Oakland offices, focusing on employment, business, commercial, real estate, corporate governance, technology and personal injury matters. He has mediated wage-hour, wrongful termination, commission, bonus, pregnancy discrimination, disability discrimination, sexual harassment and whistleblower false claims disputes. He has been recognized in Best Lawyers, Super Lawyers and Chambers Leading Lawyers. He is a 1972 graduate of Cornell University (Magna Cum Laude in Economics) and a 1975 graduate of Harvard Law School.

My Top Ten Tips for Successful MediationTherese M. Lawless

The vast majority of cases do not go trial - they settle. Most cases settle during or

after mediation. Preparing your case for mediation and being prepared for mediation are,

therefore, critical to zealous and effective representation of your clients.

1. Develop A Relationship With Your Client and Know Your Case

In order to effectively negotiate for your clients you must have their trust. This

means spending adequate time with them and preparing them for the different stages of

their case. Clients are looking to you for your expertise. They need to feel secure with

you. If clients don’t trust you, they will have a difficult time following your advice.

Take that extra moment to pick up the phone. Respond to communications quickly. Let

them know that you care about them and are working for them. Learn all of the facts of

your case. Let the mediator know how well versed you are and that your client has a

meritorious case.

2. Find Out What Your Client Wants And What She Will Reasonably Accept

Before you attend mediation, you need to know what it is your client wants, not

desires or wishes, but what she really wants. You also need to effectively manage those

expectations. I strongly suggest doing this before signing a retainer agreement. If your

client believes she has a case worth $1 million and you reasonably assess it at a much

lower value, you need to express that from the get go. Lawyers who are not forthright

with their clients set unreasonable expectations. Clients with unreasonable expectations

are difficult to bring down to earth and impossible to manage. Finding out what your

client wants and what she will accept (ultimately) will make your case that much easier

to resolve. You also need to know whether your client is willing to take risk, how much

risk she is willing to take and whether she is in a position to wait for compensation. Is

the case one that can be mediated prelitigation? Is there essential discovery that must be

conducted before attempting mediation? Sometimes these questions can’t be answered,

or aren’t answered until mediation begins but if possible, explore these areas with your

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client before attending mediation.

3. Develop a Relationship With Opposing Counsel

In almost all of my cases, I initiate contact with opposing counsel with whom I

have never previously worked by telling them the following: “I will treat you with

respect if you do the same. If you need an extension, I will grant it. Please treat me and

my staff courteously and we will do the same. Let’s do our jobs, represent our clients

vigorously and get along. I have a good sense of humor. Do you?” Establishing a good

relationship with opposing counsel can be very effective during the mediation. There

may be times during or after the mediation when the two of you need to talk directly to

hammer out specific issues and having a solid working relationship always helps.

4. Only Use A Dispute Resolution Provider You Can Trust

Great case + both sides want to settle + lousy mediator = No resolution (at

mediation). Only use mediators you know and trust or those who come with high

recommendations. Do your homework and call colleagues when in doubt. If burned,

don’t return.

5. Maintain Your Credibility With Your Opponent And The Mediator

This may be the only case your client ever has. It is, however, unlikely this will

be the only case you have with opposing counsel or a particular mediator. Your

reputation enhances the value of your case. Never forget that! I repeat - your reputation

enhances the value of your case.

6. Be Realistic

Set realistic goals for your case. Make the other side appear unrealistic. Call

their bluff when necessary. Explain your position - hold firm on those points that are

essential. Give yourself flexibility on the less essential factors.

7. Acknowledge The Weaknesses In Your Case

When I attend a mediation, I don’t hide the weaknesses in my case. I

acknowledge them and I confront them. I let opposing counsel (and the mediator when

included) know that I am aware of the negative aspects of my case. I may disagree about

how bad these things are, I may vehemently explain them away, but I don’t ignore them. 2

Not only does this help in the presentation of my case, it also gives me credibility.

8. Explore All Details Of Resolution

Start talking about critical non-monetary terms as early as possible. Don’t allow

surprises in the eleventh hour.

9. Don’t Walk First (Usually)

Always wait until you know what the very last offer is. I rarely leave a mediation

first because I want my client to know that whatever was left behind was the last and best

offer. If you leave first, you’ll always wonder and so will your client. However, I

recently mediated a case where the opposing counsel did not have much employment law

background. He did not, and could not, see the value of our case. I left telling the

mediator he (opposing counsel) needed to get up to speed on the law. Shortly thereafter,

the mediator resolved the case.

10. Don’t Take Yourself Too Seriously

Our jobs are stressful. We have demands all day long - opposing counsel, judges

and even clients. It’s important to keep things in perspective. Don’t let the unsuccessful

mediation get you down. Get back in there and chances are your case will resolve at a

later date. If not, go for the verdict. You do what you do for a reason so keep fighting.

But remember to have fun while you do it!

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Brian T. Ashe Writer’s direct phone(415) 544-1029

Writer’s e-mailbashe@seyfarth.com

Seyfarth Shaw LLP

560 Mission Street, 31st Floor

San Francisco, California 94105

(415) 397-2823

fax (415) 397-8549

www.seyfarth.com

June 7, 2018

A Defense Lawyer’s Thoughts on Mediating Employment Cases

1. Writing a more effective and comprehensive mediation memorandum.

Having the ability to organize and articulate material in a flowing, compelling and short mediation brief is often the best way to ensure a fair settlement at mediation. The brief need not be adversarial. Instead, a frank and fairly transparent discussion of the good and bad facts and law is typically more effective than digging a rhetorical trench to offset opposing counsel's arguments. This is true even in the circumstances where opposing counsel is aggressive and adversarial. Being “guardedly straightforward" allows trust to be built and is usually the best way to strengthen your hand at the table.

It is important in writing the briefs to address each cause of action in the plaintiff's complaint. Take them in turn, working in serial fashion.

In a single plaintiff lawsuit, address damages similarly, starting with hard economic damages and then moving to emotional distress damages, with light attention in passing to punitive damages. Again here, some fair-minded, almost neutral discussion is appropriate when discussing causation of economic damages. It is normally the place where you can compromise for settlement purposes.

Unless there is hard evidence creating a legitimate controversy over emotional distress or punitive damages, one should consider being more dismissive in the brief of these aspects of the case. It is somewhat dangerous for the defense lawyer to otherwise engage on these issues, because doing so may create a significant adversarial tone to the brief and necessarily results in more expensive settlements because of the nature of these damages. Hold off on a fulsome discussion until later in the live session.

Tactics are different in a class/collective matter. Here, the exposure analysis needs to be very strong and the defense data must be thoroughly vetted, organized, and above reproach. For the mediation memoranda, however, any discussion of the data needs to start at the low end of the exposure analysis for obvious reasons. One must be careful sharing one’s exposure analysis with the mediator and should do so only late in the mediation session itself and then only if necessary. As a rule, never share it with opposing counsel.

It is a good standard practice to share the mediation brief with opposing counsel far enough in advance of the mediation that he or she can make use of it in preparing for negotiations. Here again

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is one of the reasons to leaven one’s brief with both the pros and cons of your case. A frank discussion and a willingness to share your legal analysis can often help break down barriers of mistrust, stop ego-driven “win/lose” mentality, and, counterintuitively, strengthen your negotiating hand.

2. Making the most of your pre-hearing conference with the mediator.

The prehearing conference with the mediator typically takes place well in advance of the exchange of mediation briefs. It is often to the advantage of the defense lawyer to take a back seat at this meeting. The mediator should be in charge and the discussion should be largely with the plaintiff's counsel as to format, timing and location. The purpose of this approach is to cede power over ancillary negotiating points and be cooperative at this stage of the process.

The prehearing conference is also a good time to test out the theory of your case. It can be helpful to have a light “opening statement" to use when asked by the mediator for your client’s position. It can start to demonstrate mastery of the facts and the law and give advance warning to opposing counsel about the employer’s perception of the strengths of the case.

This is the correct time for the parties to start discussing perceived obstacles to settlement and suggested paths for avoiding them. These obstacles usually exist on both sides of the negotiating table and range from case to case.

3. Preparing yourself and your client for more effective oral presentations in mediation.

There is usually little upside to the defense lawyer to have a joint session at the outset of mediation. Avoid it if given the choice.

While it is often beneficial for the plaintiff to have a “cathartic event" by telling his or her story at some point during the mediation, the start of the day can be a lousy time for this. Emotions are brittle, as is the tenseness between the parties.

Similarly, if the plaintiff hears the employer's side of the story, then the opening statement can actually do harm to the negotiating process. The same is true on the employer's side of the table, particularly with an unseasoned management representative at the table. Hearing your precious case torn apart by a hired bully for the other side tends to put people in a bad mood to compromise.

Nonetheless, if the mediator or opposing counsel believe that it is necessary to have an opening statement at a mediation, present the employer's position quickly and solicit the plaintiff’s story straight from the individual, rather than through the plaintiff's lawyer. Very politely allow the plaintiff to tell his or her story and express the pain of their situation. Then, as sincerely as you can, make a dispassionate effort to show that they have been heard thoroughly. It is a little tricky to pull this off well, so avoid this tactic if it means forcing the sincerity.

The job of the defense lawyer is to ensure that the management representative is a passive participant in the opening statement. There should be no grimaces, overt note taking, or

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inattentiveness. The client should have their poker face on and simply be patient for the actual negotiations to begin.

Likewise, during the mediation it is frequently best if the client remains mostly silent during sessions with the mediator. There should be one negotiator for the employer to avoid mixed messages, unintended concessions and cross purposes. Prior to the session, ask the client to please engage in direct strategy discussions and decision making after the mediator leaves the room.

4. Dealing with emotion in the mediation.

Emotion is a regular tool used by both sides in a single plaintiff mediation and has a limited place in class/collective negotiations too. Its most obvious use is to allow the plaintiff to have the “cathartic event” mentioned above. Let the plaintiff cry, accuse, and rant if it helps bring closure to the case.

On the defense side of the table, emotion should be used sparingly. Often, it can be somewhat effective later in the negotiations, when the parties are near deadlock. At that point, anger is the finest emotion if used briefly and only with controlled intention.

It is a mistake to allow the management representative to demand an unreasonably low settlement figure based on the emotion-driven certainty that the company has not done anything wrong and that they are being extorted. Try to exert client control to avoid this rookie mistake.

A better tactic than the use of emotion is for the defense lawyer and the client to be ice cold. When negotiating, be engaged, polite and firm without any degree of emotion ever.

5. Exploring your best, worst and most likely alternatives to a negotiated agreement.

There are many valid methods for evaluating single plaintiff employment cases for settlement purposes. One way is to budget the attorneys' fees and costs associated with litigating the case through summary judgment or trial. Using that budget as a lodestar, any settlement lower than it could be a rational settlement figure depending on the circumstances.

Another way is to stand on principle and negotiate from what will be perceived as a lowball or even bad faith position. “The employer had a good reason for the employment action, so will not pay off the plaintiff simply because there is litigation.” If used, then it is best to state that the employer is taking this approach very early in the day, so expectations are set and respected.

A third path is to evaluate what the plaintiff or opposing counsel may be willing to accept as their bottom line. This will get the deal done but frequently results in a high cost for the obvious reasons.

Most typically, sophisticated employers will use the first approach. If they can secure a transaction that zeros out risk, and essentially guarantees that they will pay less money to the plaintiff than to their own lawyers, then they will hold their nose and write the check.

Less frequently, an employer will take a principled stand and simply refused to negotiate anything other than its perceived valuation of the case. That can mean that a last, best, and final offer is

June 7, 2018 Page 4

below what the plaintiff will accept and so result in a mediation session without a deal. Frankly, that is often the purpose of this approach. The employer often seeks to develop a reputation for doing right by its employees and defending itself aggressively when in litigation. That reputation is designed to transcend the immediate lawsuit.

A less used approach is the third way, trying to please the plaintiff or his/her attorney and negotiating peace on their terms. On the whole, one is to be forced into this box by lousy facts.

Regardless of the manner of valuation employed, it is appropriate to establish a low, middle, and high end range of exposure. The tricky part in doing this is trying to figure out the high-end of the settlement range. Because emotional distress and punitive damages can skew this effort, one must be careful to accord only reasonable weight to such risks lest the high-end valuations become unwieldy and counterproductive in the C-suite. Better to rely on some jury verdicts or published settlements for some rational basis to limit these types of damages in the analysis.

The valuation process should be done in concert with in-house counsel or the senior human resources professional who will be responsible for helping to negotiate the settlement. It is important that both the outside counsel and in-house stakeholder are approaching the process in harmony. Any dissonance in the approach can be disastrous for the mediation process and the client relationship. For instance, think of an in-house lawyer who wants a very low settlement to please management and an outside counsel who wants to pay more money so that a deal can be achieved. The dynamics are in tension and a bad result, with longer consequences, can result.

6. Setting the stage with your opening offer.

The defendant has the advantage of responding to a plaintiff's initial offer. If there is been a successful, transparent pre-mediation conference, and the plaintiff starts negotiations with an unreasonably high demand, then the natural and appropriate tendency of defense counsel should be to counter with an unreasonably low-ball first offer. There is a fear on the defense side that any other counteroffer will set the floor for further negotiations too high and so waste money.

The harder question is how to respond to a reasonable first offer from the plaintiff's side. As defense counsel, you want to help build the momentum towards a deal that your counterpart has put into motion, yet you are judged rightly by the amount of money you save the company when all is said and done. If one responds to a reasonable, good faith initial offer with something that is obviously lowball, then an opportunity to create positive momentum may be squandered and the development of goodwill in the negotiating process hampered.

It is really impossible to state a particular rule for initial counteroffers by an employer at mediation. There are too many variables, including the strengths of the plaintiff's claim, the nature and quality of opposing counsel, the aptitude and commitment of the mediator, the employer’s fortitude and defense counsel’s negotiating talent.

Nonetheless, it is prudent to sketch out in advance of the mediation a range for the first counteroffer, perhaps even the first two or three counteroffers in fact. That will bring some

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discipline to the evaluation process from a more objective perspective rather than a reaction in the heat of the moment. Have this discussion with the client in advance of the mediation date itself, and then confirm the initial mediation approach at a dinner the night before or breakfast the date of the mediation.

7. Planning your settlement moves in mediation.

As stated earlier, it is often prudent to sketch out a series of anticipated moves to make once settlement negotiations are underway. This would include the employer’s second counteroffer, which is probably the second most important offer in any negotiation. (The most important is the last, best, and final offer.) The employer’s second counteroffer needs to be sufficiently generous to stake out a legitimate claim to good faith negotiations so that progress can be made to the deal.

For this reason, many defense lawyers will make a relatively generous second offer. Anecdotally, this tactic has developed with experience. My tendency as a less experienced lawyer was to move at a much more conservative pace throughout the settlement process.

Start generously, depending on the circumstances, and then start moving to smaller offers by the fourth round and thereafter. That will signal a need for closure and a lack of any interest in splitting the baby. This tactic tends to put more pressure on the plaintiff than walking in lockstep towards a middle ground.

Once a bona fide good faith desire for settlement has been established, it is difficult for the plaintiff to walk away from the table even though the offers keep getting smaller. By the same token, the employer signals strength, mastery of the case, and courage by making smaller offers and indicating to the mediator that its interest in continued negotiations is waning.

If party-driven negotiations are failing, which can be the case, it is appropriate to rely on the mediator for suggestions. If the brief was excellent, relative transparency in the pre-mediation conference was secured, and the employer’s initial positions in the negotiations were fair, then there should be a trusting relationship with the mediator. If he or she is worth the fee, then this is an excellent time for guidance. That does not mean that defense counsel needs to accept the mediator’s advice, particularly when being nudged past the employer’s monetary comfort zone, but a path forward can be illuminated from which the defense can interpret its next move.

8. Working with the mediator to avoid or break impasse.

There are several occasions during most mediations where counsel has to take a gut check. The classic time is when impasse is looming. Here are a few tips for consideration at this difficult juncture:

First, do not fear impasse. It is counterintuitive and often extremely difficult, but sometimes impasse helps. Walking away politely and firmly is the ultimate show of conviction. The mediator will work on the matter after the session breaks to try to get things on track, so all will not be lost.

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Second, do not be afraid to show some transparency. In appropriate circumstances, it is beneficial to disclose to the mediator the employer’s “actual” budget and needs for the case. The mediator will have the benefit of understanding the other side's budget and needs, obviously, and so may be able to think up a strategy to meet the employer’s goal, or at least keep the deal moving towards closure.

Third, before the parties’ positions ossify, consider using one of several creative ways of fashioning settlement offers that allow for more flexibility compared to standard offer/counter offer bargaining. For instance, “If-then bracketing” is a conditional proposal in which one party asks: “If we will go to $X, then will you will go to $Y?” This technique allows for dual movement conditioned on acceptance of the first figure and is good to try near impasse because the mutually-assured movement that can restart negotiations. It also provides more information to the other side about thresholds and expectations, the lack of which can sometimes be the root cause of an impasse. It is best to use the if-then bracket towards the end of negotiations, but not as a final tactic.

Another bracketing idea is to have the mediator float numbers in private to the parties. It goes something like this: "If the defendant is willing to settle for a number between $75,000 and $300,000, then would you [plaintiff] be willing to settle for a number between $1 million and $600,000?" The idea is to start closing the gap between the defendant’s ceiling and the plaintiff's basement while allowing the parties to cling to their more comfortable offers. This technique is also good because it provides significantly more information to the mediator in private, so he or she can cut through the posturing that often accompanies direct negotiations.

Another technique involves using a mediator's proposal. Here, the mediator has invested significant time speaking with each party about their expectations, is able to size them up, and has a sense of where a middle ground might lie between the reluctant dealmakers. The mediator floats a single number, or perhaps a bracketed number, to the parties in private. Each party either accepts or rejects the proposal without condition or modification and neither party knows the other party's response unless both parties say “yes.” In this way, the party who accepted the offer will not be prejudiced in subsequent negotiation sessions if the other party rejects it. The mediator's proposal is almost necessarily done at the point of impasse, so typically at the end of negotiations.

The ultimate settlement technique is to make a “last, best and final” offer. This is when one party indicates its bottom line and are actually willing to terminate the negotiating session if it is not accepted. If the defense lawyer has been relatively transparent and fair minded in acknowledging the variables in his/her case throughout negotiations, then this is a good tactic to use towards the end of the day. In fact, some plaintiff’s lawyer seem to wait until the last, best, and final to know when to close the deal. On the other hand, if there is little good will or trust in the session, this technique should be avoided.

9. Non-monetary considerations: apology, reference letter, reinstatement.

Non-monetary elements of a settlement can help finalize a deal, but are rarely prime motivators. Of the various nonmonetary considerations, a reference letter and a protocol for prospective employers to contact the defendant are the most typical.

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The prudent defense attorney insists that any reference letter remains neutral and limited to job title, dates of employment, and, with written permission from the plaintiff, salary. This is a standard that is uniformly adopted in all industries, so counsel should have a relatively free hand pushing back against any plaintiff’s request for a substantively glowing referral letter.

When establishing a protocol for prospective employers to use when seeking a reference, it is wise to select one individual, preferably in human resources, to be designated as the employer's representative. Put the burden on the plaintiff to use that person's name and contact information on any prospective job application in order to trigger the employer’s duty to limit the reference to neutral information. This avoids having other management personnel involved in this issue and allows for uniformity in the referral process.

If a non-defamation clause is part of an individual settlement agreement, then it is important for the employer to limit the number of people bound to it. The limitation can be drafted either by rank in the hierarchy, job title, or specific names of managers. It is a mistake to bind the entire company to a non-defamation clause.

In class/collective actions, nonmonetary relief is not typical and not that important to the deal. It can include an agreement to reclassify employees, to institute a change in procedure, or even to secure some manner of prospective injunctive relief. Anecdotally, these levers are often less valuable in settlement negotiations than in securing judicial approval of a settlement. Court’s look at injunctive relief as one element of the approval process, so providing for it will check a box in favor of approval.

Additional non-monetary elements of a settlement can include training, either for discrimination/harassment or for appropriate wage and hour protocol. Also, mandatory coaching of offending managers can be considered when appropriate and potentially helpful.

Most of these non-monetary elements should be floated as options towards the end of negotiations to help sweeten the deal when the plaintiff is objecting to the amount of settlement money. They are less valuable earlier in the session, so tentatively reject them if sought by the plaintiff early on.

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Brian T. Ashe is a partner at Seyfarth Shaw LLP. This term, he won a unanimous decision before the United States Supreme Court on a matter involving whistleblowers under the Dodd Frank Act. Brian’s practice includes defending employers in class actions and complex employment litigation. He represents employers in wage and hour matters, unfair competition litigation, discrimination and wrongful termination actions. A good portion of his work consists of counselling where he provides creative solutions to complicated human resources management challenges. He is consistently ranked as one of the nation’s leading employment lawyers in Chambers USA, Legal 500, and BestLawyers in America. Law360 awarded him a “Legal Lion” award earlier this year.

Therese Lawless of Lawless & Lawless has successfully litigated and tried hundreds of cases on behalf of employees and individuals. She has repeatedly been named one of the Top 50 Women Attorneys in Northern California. She also is recognized as one of the “Top 100 Attorneys in Northern California.” Ms. Lawless is committed to advancing the rights of workers and employees in a broad range of cases including gender, age, disability and sexual orientation discrimination, sexual harassment, whistleblower, and retaliation claims. In 2015, Ms. Lawless represented Ellen Pao in a landmark gender discrimination case against venture capital firm Kleiner, Perkins Caufield and Byers. This case brought to light the many issues and obstacles faced by women in the workforce. Ms. Lawless received her J.D. from George Washington University and her B.S. from Cornell University. She clerked on the Ninth Circuit Court of Appeals for the Honorable Warren J. Ferguson.

Frank Burke is a panel member of ADR Services, Inc. handling mediation and arbitration matters in its San Francisco, San Jose and Oakland offices, focusing on employment, business, commercial, real estate, corporate governance, technology and personal injury matters. He has mediated wage-hour, wrongful termination, commission, bonus, pregnancy discrimination, disability discrimination and sexual harassment disputes. A full time neutral, he applies his 42 years of experience as a business trial lawyer in national law firms having handled a diverse range of business disputes involving varied business sectors in federal and state courts and administrative agencies in 26 states, China and Canada. He has been recognized in Best Lawyers, SuperLawyers and Chambers Leading Lawyers. He helps parties resolve their conflicts in a fair, cost effective way through creative approaches and relentless follow-up in a framework of trust and civility. He uses a mix of facilitative and evaluative approaches to help parties reach a durable settlement that all can accept. He is a 1972 graduate of Cornell University (Magna Cum Laude in Economics) and a 1975 graduate of Harvard Law School.

RUTH V GLICK is a full-time domestic and international mediator and

arbitrator and with over 25 years experience in a wide variety of business contract and tort, commercial, securities, financial, real estate, technology, labor and employment disputes. She is on the large and complex case, national commercial and labor and employment panels of the American Arbitration Association.

She has resolved a number of substantive employment disputes including

nationwide class action sexual harassment lawsuits, racial, pregnancy and gender discrimination, wage and hour statutory claims, employee recruitment and non-compete agreements and wrongful termination, in addition to serving as a labor arbitrator for a number of grievance and interest arbitrations.

She is a Distinguished Fellow of the International Academy of Mediators, an

IMI Certified Mediator, Fellow of the Chartered Institute of Arbitrators, Fellow of the College of Commercial Arbitrators and former Chair of the Dispute Resolution Section of the American Bar Association. For more information see www.ruthvglick.com

Jorja Jackson is Senior Corporate Counsel for Salesforce, where she specializes in providing advice to business units globally on all aspects of employment including management of international litigation, discipline, mergers and acquisitions, terminations, training and benefits. Jorja also advises on diversity and inclusion and government compliance obligations. Prior to working for salesforce, Jorja was Associate Counsel at Robert Half International, Inc., and before that, Corporate Counsel at ArcSight, an HP Company, also providing advice to managers and human resource professionals on global employment matters. Prior to her in-house legal career she practiced for several years at the country’s largest labor and employment boutique law firm, Littler Mendelson, specializing in employment litigation. She has her bachelor’s from UCLA and her JD from University of California, Hastings College of the Law. She was recently named one of the Minority Corporate Counsel Association’s ten Rising Stars.