The workplace can be a source of tremendous collaboration, collegiality and productivity. It can also be home to conflict and mistreatment by fellow employees and employers. Workplace discrimination is just one example of the negative environment some employees face. According to the U.S. Equal Employment Opportunity Commission, in 2021, there were 61,331 workplace discrimination charges in the U.S. These charges resulted in more than $34 million in damages awarded in federal court. And that doesn’t even include awards granted by state and district courts that amount to hundreds of millions of dollars in damages.
The pandemic has only served to exacerbate employment disputes, as remote and hybrid workplace models have added to the list of issues that give rise to conflicts. In an effort to find ways to better manage these disputes, the alternative dispute resolution (ADR) process is increasingly being seen as an effective means to achieve equitable settlements and contain legal costs.
The Evolving Nature of Employment Disputes
The most common forms of employment disputes involve an employee feeling mistreated by their employer. This might take the form of harassment, wrongful termination or retaliation. Internal complaints frequently allege discrimination, pay discrepancies, wage and hour violations and disparate treatment. The pandemic has introduced some new factors that are expected to lead to future disputes.
“In addition to differential treatment and disability-related claims, I anticipate long-COVID symptoms will lead to future employment disputes,” explains Stephen H. Sulmeyer, J.D., Ph.D., JAMS mediator, arbitrator, special master/referee and hearing officer. “Also, working mothers with children who contract COVID will be the source of disputes. In such cases, parental responsibilities are likely to come into conflict with work requirements, leading to potential disputes.”
Sulmeyer believes that intergenerational disputes will also arise as older and younger employees clash over the use of remote work technologies and varying on-site requirements. He also envisions a lack of sensitivity to gender identity language as a potential source of friction between older and younger employees.
Why ADR Makes Good Sense in Employment Disputes
Addressing employment disputes through ADR makes good sense, particularly in light of the backlog of criminal and civil cases in the court system today.
Hon. Jamie Jacobs-May (Ret.), JAMS mediator and special master/referee, points out additional reasons that ADR is often a prudent choice. “In many cases, employment disputes involve a strong emotional component,” states Judge Jacobs-May. “An adverse employment action can leave an employee feeling betrayed or disrespected. For many of us, our job is a source of identity. Employers, likewise, are upset by allegations they believe are unfair. Workplace conflict can quickly lead to anger and mistrust. ADR is particularly useful in allowing the parties to feel heard.”
Sulmeyer concurs. “Mediation is infinitely better at rebuilding or repairing broken relationships, because it gives the parties an opportunity to really speak to each other and hear one another,” explains Sulmeyer. “I find that through mediation, there's less room for the parties to project their own worst fears or beliefs onto the other side. And by dealing directly with each other and talking about the real psychological and emotional issues that are at the heart of these disputes, it becomes possible to find resolution.”
Another important consideration is cost. “Litigating such disputes can be ruinously expensive,” adds Hon. David I. Brown (Ret.), JAMS mediator, arbitrator and special master/referee. “Under state law, the employer is nearly always on the hook for attorneys’ fees. At the very least, mediation affords an early opportunity to do some informal discovery on the case. And it can prove instrumental in resolving the issue before significant costs are incurred, which in the case of a small business can mean avoiding a significant strain on limited resources.”
How Neutrals Approach Mediation
The role of the neutral is essentially the same in employment disputes as it is in other types of mediation. Judge James uses the pre-mediation conference as an important opportunity to gain critical insights into the respective legal strengths and weaknesses of each party to the dispute. “I find these sessions quite helpful in getting to understand each side’s concerns ahead of time, beyond what is contained in the briefs,” shares Hon. Ellen Sickles James (Ret.), JAMS mediator, arbitrator and special master/referee.
Judge Jacobs-May believes it is important for all the litigants to be heard and understood. She believes that while the mediator doesn’t decide the case, helping parties evaluate their case, honestly and authentically, is vital. “I tell each party, in confidence, where I see the vulnerabilities in their case,” explains Judge Jacobs-May. “Part of my job is to help parties evaluate their case, which I hope will inform their process of making settlement decisions and managing risk.”
“Neutrals are well suited for helping the parties better understand the risks and the benefits of using mediation to reach a settlement,” states Judge Brown. “A crucial part of our job is to educate everyone and explain the advantages of resolving the case rather than facing the uncertainty of a trial following years of discovery at great expense. More often than not, I am able to show that the benefits of resolution through mediation far exceed [those of] going to trial.”
Judge James adds that the mediator’s proposal can also be an invaluable tool in reaching a settlement. “When both parties request it, the mediator develops a settlement number based on what seems appropriate,” says Judge James. “Then both parties are presented this proposal for consideration. Because this is often a highly emotional decision, the litigants are typically given a few days to think about it and discuss with their lawyers and family members. If both parties accept, a settlement is formally reached. Only if all parties accept the proposal is it revealed to both sides that either side had approved the number, preserving the confidentiality of each side’s position.”
What Lies Ahead for Employment Disputes
In addition to the pandemic-related disputes that are currently making their way through the investigation process, a few issues hold the potential for future disputes. According to Judge Brown, new legislation involving the posting of pay scales is likely to lead to disputes as employees react to what they perceive to be inequities in their compensation.
“Also, I envision fallout from the United States Supreme Court’s decision in Viking River Cruises v. Moriana, which impacts employers’ right to enforce arbitration agreements related to claims under California’s Private Attorneys General Act,” states Judge Brown. “What it likely means for arbitrators is that we’re going to start seeing pocket cases, which may involve hundreds and hundreds of people being arbitrated. It’s not yet clear what this will mean in terms of work volume for the ADR industry in the labor litigation arena.”
“If I could peer into a crystal ball, I would surmise we are going to see more discrimination cases involving sexual orientation, especially for those who are in transition in the transgender process,” postulates Judge James. “As businesses have been shrinking in response to COVID, there have been a lot more layoffs, which will inevitably lead to more complaints of unfair termination. I suspect we will see an increase in pay disparity cases, as well as those involving overtime issues, pregnancy discrimination, sexual harassment, and medical and religious accommodation.”
Virtual ADR Is Here to Stay
All four neutrals are convinced that virtual ADR is here stay, while hybrid models and in-person mediation will continue to play a role when preferred by the parties. “Virtual ADR has debunked the myth that everyone has to be in the same room, allowing the neutral to look participants in the eye and establish a rapport,” explains Judge Jacobs-May. “JAMS has done a good job making virtual ADR work seamlessly, and as a result, I find online mediation to be every bit as successful as in-person mediation. Participants tend to be more relaxed, and I am still able to establish a rapport virtually.”
“Virtual ADR is actually quite good at revealing participants faces, which I use to read their expressions,” stated Judge James. “Because each person has their own screen, it is easier for me as the mediator to take the emotional temperature of the different parties as we work through the discussion. I find this is even more effective than if we were all sitting together in a room. Plus, I believe that the virtual setting is perceived as a safer space when sharing emotionally fraught topics.”
Sulmeyer agrees that virtual ADR is highly effective. “There are pros and cons,” states Sulmeyer. “I find being face-to-face allows for a better read of the participants, but on the other hand, going virtual is far more cost-effective. It’s easier to get the ultimate decision-makers to participate remotely, especially when they don’t have to take time out from work to travel, which can make it easier to reach a resolution.”
A side benefit of the trend toward virtual ADR is that it has created more opportunities for attorneys. Judge Brown explains that in the past, the litigants would typically hire law firms based in their geographic area. “Now I’m seeing firms from other states come in on litigation,” says Judge Brown. “Once they have the required certifications, law firms can represent parties pretty much anywhere. Virtual ADR has made it possible to take depositions from all around the world, with the attorney never having to leave his or her office. I believe this will open the door to a lot of new possibilities in the future.”
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