Where a dispute to be mediated pertains to an ongoing relationship (e.g., a disagreement over parental visitation rights or an employee grievance over working conditions), the parties are often willing to be highly creative in the crafting of a mutually beneficial resolution of their differences. This is not because they necessarily like one another or desire to be generous. It is rather because each party recognizes that he must endeavor to accommodate the other party's interests if his own interest are to be satisfied.
But this sentiment is rarely found in a mediation of a post-termination employment dispute. Because there is little prospect of a future, mutually beneficial relationship, highly adversary positions are commonly assumed and little thought is wasted on meeting the needs and concerns of the other disputants.
Preoccupied with the issue of just how much money is going to change hands, advocates almost always invest their greatest effort in convincing the opposing party (and the mediator) of the merits of their positions toward the end of negotiating the best possible monetary arrangement. The attitude adopted in negotiations tends to be one of giving the other party as little as possible to preserve most of the pie for oneself and one's client.
Contrary to the dogma sometimes espoused at mediation seminars, there is a time and place in which such a perspective toward negotiations is entirely appropriate. To paraphrase Professor L. Randolph Lowry, mediation is not always an herbal-tea-and-pillows experience. When the issue is dollars, and there is nothing one can give the other side in lieu of movement from one's bargaining position (e.g., a favorable reference letter), an advocate owes a duty to his client to negotiate effectively to get as much, or give up as little, as possible.
As distasteful and time-consuming as they may find it, advocates must "dance the dance" of the distributive bargaining process. Concessions should be made as necessary to keep the other party participating in the process, but with the client's monetary objectives in mind at all times.
There are, however, a host of issues besides money that commonly arise in the mediation of an employment dispute and that do not present the parties with such a "win/lose" proposition. How these issues are resolved frequently constitutes as great a barrier to settlement as the dollars to be exchanged between the parties. Unfortunately, it is in the negotiation over these issues that employment practitioners frequently experience trouble switching gears and adopting a less adversarial, more accommodating posture.
A case in point is the frequent demand by employers for the inclusion of a confidentiality provision in the parties settlement agreement which prohibits the employee/plaintiff from disclosing to third parties information about the settlement. As part of this demand, employers frequently insist that the provision provide that its breach subject the plaintiff to liquidated damages so as to give him an incentive to comply with it.
A protest is sometimes heard from plaintiffs' attorneys that such provisions operate to defeat a societal interest in learning the outcome of disputes. The appropriate response to this complaint is threefold. First, the principal obligation of a plaintiff's attorney is to his client, who likely values the recovery of money much more highly than achieving publicity. Second, if publicity is the goal, the point could be much more forcefully made by abandoning settlement efforts and prevailing on the disputed claims at trial. Finally, as long as settlement is desired, it must be recognized that one of the principal motivations for the employer in the first place was to avoid both getting adverse publicity and establishing a precedent that encourages other employees to bring claims.
The more frequent objection raised by plaintiffs' attorneys to such confidentiality/liquidated damage provision is that they constitute an invitation to the employer to sue the plaintiff on an unsubstantiated allegation that the plaintiff was the source of a leak. In this connection, plaintiffs' attorneys often make the following points:
It will, as a practical matter, be necessary for the plaintiff to reveal the information to certain third parties.
- Other people already know of the existence of the dispute and are likely to draw inferences from its conclusion.
- Others are likely to place the plaintiff in a difficult position by asking questions about what transpired.
- Personnel of the employer could just as easily leak the information.
- If the employer were to sue, the plaintiff would have a difficult time enticing a competent attorney to represent him.
- Irrespective of the outcome of the litigation, being sued by the employer for breaching the provision would subject the plaintiff to significant hardship.
- It is draconian to require the plaintiff to pay back most or all of the settlement proceeds in the event of an inadvertent disclosure that results in no real damage to the employer.
Faced with the forceful articulation of the opposing party's concerns relative to the confidentiality and liquidated damages issues, the knee-jerk reaction of many attorneys is to throw their hands up in despair over their inability to achieve agreement. It is at this point that it becomes their inability to achieve agreement. It is at this point that it becomes essential for counsel to change their mode of thinking and attempt to work together in an integrative process to iron out a provision that meets the essential concerns and needs of all the parties.
Some approaches that can be used to bridge the gap include:
- Making the provision reciprocal, so as to be binding on the employer as well as the plaintiff.
- Making the provision applicable only to disclosure of the amount or terms of the settlement, as distinguished from the fact of the settlement.
- Freeing any party to disclose, when asked, that the parties settled (or resolved) the matter.
- Including exceptions applicable to spouses and immediate family members; attorneys, accountants and tax advisers; officers and employees of the employers on a "need to know" basis, federal and state taxing authorities; and situations where a party is ordered by a court, or compelled by law, to make disclosure; requiring proof of a breach of the provision by "clear and convincing evidence," as opposed to by a "preponderance of the evidence"; limiting the "liquidated damages" to a reasonable sum; in lieu of liquidated damages, stipulating to an order from the court compelling the parties to comply with the provision, so as to subject an offending party to the possibility of being held in "contempt"; providing for arbitration of any dispute relating to an alleged breach of the provision; and specifying that the prevailing party in any dispute over an alleged breach of the provision is entitled to recover its attorney fees and costs.
Conceivably, there are many other approaches that could also be used to bring about agreement on this term without compromising the essential interests of any of the parties. To discover them, however, it is essential that counsel recognize that in some instances the client's interest are best served by abandoning hard-nosed negotiation tactics in favor of a conciliatory, cooperative methodology.