Why It Makes Sense to Mediate Employment Disputes

Posted on Mar 18, 2016

Eric Paltell, Esquire
Positive Solutions Group
Charlottesville. Virginia

Workplace disputes are some of the most emotionally volatile claims that make their way into the legal system.  An employee who believes that he or she has been wronged by their employer’s action is angry and hurt, much as a jilted spouse is enraged by the actions of their soon-to-be ex-husband or wife.  For the employee, not only is their economic well-being dependent upon their job; their self-esteem and social network may be intertwined with their workplace. On the employer side, a frustrated supervisor or company owner may feel that they have given a problem employee one opportunity after another, only to see the relationship devolve into threats of litigation and an unproductive or disruptive employee in the workplace.

When an employment relationship reaches the point of no return, employees often turn to litigation as a means to seek redress. An employee who feels he or she has given many years of hard work to an employer, only to be met with a demotion or termination in return, may turn to a lawyer or a federal agency such as the EEOC to get what they perceive to be justice.  Once the claim enters the legal system, it will usually take a year or more for the employee to have their day in court. In the meantime, legal fees mount, bills still need to be paid, and the employee may be in need of his former employer’s assistance in getting a reference for a new job.

In contrast to a protracted and expensive lawsuit, mediation offers an affordable and expeditious means to resolve workplace disputes.  In an employment mediation, both the employee and the employer are given an opportunity to meet, review the circumstances that led to the challenged personnel action, receive input from a knowledgeable mediator about the strengths and weaknesses of their position, and work towards a solution that allows both sides to move forward.  In the case of the employee, this may mean working out a resolution that provides monetary compensation to assist in a transition to new employment, as well as some non-monetary benefits (more on that below).  For the employer, it may mean a chance to remove a problem employee from the workplace, while also eliminating the risk of litigation and preserving the confidentiality of the settlement.

So what makes employment disputes especially well-suited for mediation? After having worked in the field for almost 30 years, I believe there are three answers to that question: (1) employment disputes are usually not “big dollar” cases; (2) confidentiality is often extremely important; and (3) mediation offers an opportunity to obtain results not available in litigation.  Each of these is discussed below.

One of the things that makes employment litigation unusual is that the costs of taking the case to trial often far exceed the actual dollar value of the case. In many cases, the employee’s remedy is limited to lost wages (less interim earnings), and it is often difficult to obtain punitive and compensatory damages.    However, many of the statutes that give employees grounds to sue (such as Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, and the Fair Labor Standards Act) include fee shifting provisions that allow a prevailing employee to get their attorney fees paid by the employer.   For this reason, it often makes sense to try to settle an employment case early, before substantial fees and expenses have been incurred and the cost of settling becomes prohibitive.

Another unique aspect of employment litigation is the unusually high value that is placed on confidentiality.   Many employment cases involve allegations of alleged improper behavior by a supervisor, such as sexually harassing conduct or racially offensive remarks.  Even when a case does not involve such allegations, an employer may be concerned that other employees are watching the litigation, and will also file suit if they perceive the employee to be successful.   A mediated settlement offers both parties an opportunity to confidentially resolve a claim, and an employer can include provisions in the settlement that impose a substantial penalty on an employee who fails to maintain the confidentiality of the agreement.

Finally, and maybe most importantly, mediation allows the parties to an employment dispute to work out a resolution that would not be available in court.  Some of the non-judicial, non-monetary remedies available in mediation include:

  • Transfers and reassignments for current employees;
  • Continuation of health insurance;
  • A letter of reference;
  • An agreement not to contest a claim for unemployment benefits;
  • An agreement to bridge employment for some period of time to allow an employee to qualify for disability benefits; and
  • A personal apology from the employer.

Unlike in litigation, in mediation, the parties have full control over the outcome, and are free to accept or reject creative outcomes that would not even be an option if the case were resolved in a court of law.

In sum, while mediation may not be a “magic bullet” that can resolve every workplace dispute, it is very often an effective – and efficient – means to allow an employer and employee to move past their disagreements and on to new opportunities.

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