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American Bar Association - Defending Liberty, Pursuing Justice

FALL 2009

Vol. 6, No. 1


Business Law


Expanding the Pie in Employment Mediations

Mediation of employment disputes offers an excellent opportunity for creativity in generating options for resolution. Nontraditional or nonmonetary issues that address the underlying interests of one or both parties increase value in a negotiation or “expand the pie” in an otherwise distributive bargaining session. While good strategy for mediation includes discerning the underlying interests of both your client and opposing party, too often nonmonetary interests are not adequately explored in this analysis.

Employment disputes have a profound impact on the lives of the parties. As a result, underlying issues that are not necessarily legal or monetary may serve as barriers to settlement in employment mediations. Full resolution and more satisfying outcomes in mediation result from negotiations that include direct discussion of the parties’ underlying interests and settlement components that address those interests.

For example, in a sexual harassment case involving a woman who had PTSD due to earlier sexual abuse and was severely traumatized by the work environment, the employer agreed as a component to the monetary settlement amount to pay plaintiff’s future psychotherapy bills up to $10,000. In a disability discrimination discharge case set in a very small town in a rural area, plaintiff could not accept leaving her employment after 30 years without a retirement party. In addition to the settlement amount, the employer agreed to host a retirement party for plaintiff and to give her the company’s traditional retirement gift—a riding lawn mower. In an age discrimination/constructive discharge case involving a high level executive, as part of a severance package, plaintiff agreed to be available to work as a consultant on a contractual basis to alleviate defendant’s business concerns during the acquisition of another entity.

The parties’ underlying interests in any given mediation vary greatly and provide opportunity for the advocates and mediator to be creative in identifying options for resolution and expanding the pie for bargaining. The following is a nonexclusive list of non-traditional or nonmonetary components of resolution in employment mediations:

Reputation Concerns

  • Confidentiality clause with enforcement mechanisms
  • Nondisparagement clause
  • Agree on content of statements to press
  • Joint press release
  • Change basis of employment separation from termination to resignation or layoff
  • Expunge (or seal) negative personnel records
  • Agree to oppose public disclosure requests for sensitive documents relating to plaintiff
  • Destroy all copies of investigator’s flawed report and all supporting documents
  • Agree on announcement to other employees regarding the separation/departure of plaintiff


  • Agree to specifically characterize settlement amount for tax purposes
  • Payment of bonus or other delayed monetary component of salary
  • Structured payment of settlement amount to minimize tax consequences and/or accommodate defendant’s cash flow concerns
  • Deposit of settlement amount to education fund or other annuity with tax benefits to employee
  • Contribute portion of settlement amount to charity of plaintiff’s choice
  • Contribute to pension/retirement account
  • Payment of future therapy/medical costs
  • Reimburse future tuition costs
  • Reinstate annual leave/sick leave for severance payout

Plaintiff’s Future Employment

  • Letter of recommendation (positive information only about plaintiff’s performance)
  • Neutral reference letter (dates of employment, position held)
  • Agree on response to inquiries from prospective employers
  • Identify specific individual to respond to reference calls from prospective employers
  • Agree on date of employment separation
  • Outplacement assistance
  • Renegotiation of noncompete agreement
  • Notification of future job openings with defendant

Policy Changes/Remedial Measures

  • EEO training or other training to perceived offenders/management
  • Institute/improve process to handle discrimination complaints or accommodation requests
  • Institute/improve process for reporting and investigating harassment complaints
  • Institute and disseminate religious accommodation policy and request procedure
  • Investigate and take appropriate disciplinary measures against perceived offenders
  • Appoint high level manager to remain involved to monitor and prevent similar problems
  • Post/disseminate antidiscrimination policies/procedures

Other Claims

  • Mutual release
  • Agree not to challenge claim for unemployment benefits or workers’ compensation benefits
  • Agree to facilitate eligibility for long-term disability benefits or medical retirement
  • Agree to assist in future litigation


  • Apology (written or oral)
  • Employer’s recognition or acknowledgement of difficult outcome for, or impact on, plaintiff
  • Direct conversation between parties at mediation

Employment Status

  • Reinstatement to former position
  • Hire plaintiff as contractor for finite projects
  • Reinstate/transfer plaintiff to a different position as reasonable accommodation
  • Employ accommodation consultant to identify potential disability accommodations
  • Agree not to reapply or accept reemployment with defendant
  • Continue employment status with new title for finite period to assist in job search
  • Continue employment status without pay until vesting of retirement benefits
  • Agree to retain seniority status and avoid break in service for future employment


  • Inventory of and return of company property by plaintiff
  • Continued assistance and cooperation by plaintiff to train replacement
  • Agree on timing and manner of removal of plaintiff’s name from employer’s website
  • Agree on wording of automatic reply to e-mails sent to plaintiff’s email address with employer and agree to timing of ending functionality of plaintiff’s email address

Benefits and Perks

  • Continue health insurance coverage at employer’s expense or payment of COBRA benefits
  • Continue employee benefits and perks (i.e., gym membership, employee discount)
  • Provide company services/products at no cost (i.e., free annual cruise on defendant cruise line)
  • Continue access to professional development training offered to current employees
  • Certificate of appreciation recognizing plaintiff’s long tenure
    Company sponsored retirement party

Nancy Maisano, founder of Maisano Mediation, LLC in Seattle, has worked exclusively as a mediator since 2001. Nancy has mediated more than 700 federal and state employment discrimination claims and other employment-related claims including wage and hour violations, breach of contract, FMLA and whistleblower violations. She can be reached at


Originally published in the September 2009 issue of the King County Bar Association Bar Bulletin. Reprinted with permission of the King County Bar Association.


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