Special Attributes of a Sexual Harassment Dispute
Sexual harassment is the most common type of workplace harassment. Matters involving sexual harassment and gender bias are extremely personal in that they cut to the core of an individual’s identity. Gender is one of the most fundamental traits a person has and when that person believes they were sexually mistreated or discriminated against due to the essence of who they are, they can suffer serious emotional, psychological and physical damage. More so, when their livelihood is put in jeopardy, the adverse effects of the misconduct can be severely exacerbated.
Sexual harassment cases are highly sensitive in nature, requiring attorneys and mediators to have an increased appreciation for the emotionally charged state of the participants. Both the employee and employer representatives who attend mediations are likely anxious and uneasy about the nature of the claims, and merely discussing them can cause emotions to spike. Skilled mediators have the delicate task of helping both sides navigate through the difficult process of talking about the disturbing allegations and finding a mutually satisfactory outcome. They will recognize the special needs of the parties and create a safe, non-judgmental environment for all sides.
Current or former employees who appear at sexual harassment mediations can be traumatized from their employment situations and require extra care and sensitivity. These employees often felt powerless or humiliated at their jobs, afraid to take action to stop the alleged harassment for fear of potential backlash. They can arrive at the mediation feeling uncertain and apprehensive, perhaps still afraid of retribution, and will need to be assured they are in a secure space. They will also need assistance setting aside their negative thoughts and emotions in order to shift to a problem-solving mindset focused on finding a joint resolution to the conflict.
Employers typically arrive at mediation denying knowledge or culpability of alleged offending behavior but understand that they have no choice but to deal with the complainant’s allegations even if they believe they are meritless. For companies with strong value systems that have implemented preventative policies, procedures, and training, it can be very hard to accept that they now face accountability.
In the digital era, employers must also contend with the added difficulties presented by social media platforms and online outlets that create limitless opportunities for employees to run afoul of corporate guidelines and existing laws. Using electronic devices, employees can freely post, email, or text messages that can be misconstrued or taken out of context, all of which can create potential employer liability.
Mediation can be used by employers to reassess their company policies and procedures, and explore the most efficient, effective, and economical means of resolving disputes. In deciding how to best handle pending sexual harassment claims, employers will want to consider their reputational risk, the cost of extended discovery, and the impact an embarrassing lawsuit could have on their staff and clients.
Who Should Participate?
Prior to the in-person mediation session, the parties and their attorneys will have the opportunity to speak with the mediator jointly in a pre-mediation teleconference or separately in a one-on-one conversation. One of the primary goals of the initial teleconference is to ensure that the right people attend the mediation.
Whether a mediation is court-referred or private, it is always beneficial to have the decision-makers in attendance. In order to optimize the likelihood of a successful outcome, the people sitting at the mediation table should be empowered with the negotiating authority to make decisions on the spot. When a party’s decision-makers are absent, the parties operate at a disadvantage and shortchange the mediation process, as they will neither experience the live exchange of information nor the evolution of the mediation firsthand.
Sometimes it is beneficial for complainants who are highly apprehensive or distraught to have a support person present to help them deal with their emotional difficulties. This could be a trusted family member, friend, or co-worker that they will rely on in their decision-making process. Emotions can override rational thought and the support person can assist them in reining in their emotions, thinking clearly, and focusing on the problem. If the complainant does elect to bring a non-party into the mediation room, this must be disclosed to the other side in advance, and approval should be obtained from all participants.
Employers should have business people attend the mediation who have the authority to evaluate risks and costs objectively and approve a deal. If the employer has Employment Practices Liability Insurance (EPLI), the presence of the EPLI adjuster will greatly increase the likelihood of settlement. The carrier understands the importance of making business decisions to keep costs down, manage risks, and get to the end stage sooner. Mediators frequently hear parties who are reluctant to move off their positions maintain that “it’s about the principle.” Carriers, on the other hand, will evaluate the dispute through a business lens and cut out the emotional baggage that can cloud sound decision-making.
Sexual Harassment Claims Change the Mediation Environment
Sexual harassment disputes are often personal and tense, airing intimate details no one is comfortable discussing. They need to be handled with an elevated degree of sensitivity, and all parties and counsel must treat each other and the mediator with dignity and respect. The mediator should ensure all participants feel both physically and emotionally safe and understand that their concerns will be heard and respected.
In emotionally charged matters, it is important to give distressed parties the opportunity to express themselves. If a party has experienced trauma that has impacted their judgment and they are not given the opportunity to tell their story and communicate their feelings, they will not experience emotional release and their actions could be dictated by negative thoughts and feelings. If these negative emotions are not removed or diffused, they will be an impediment to logical, rational thought and impair the person’s ability to be an effective mediation participant and arrive at a resolution.
Various techniques can be utilized by both mediators and attorneys to aid in gaining a better understanding of a traumatized individual’s needs and help them control their emotions. Some examples are reflective, empathic, and active listening. Reflective listening is restating and clarifying what is said in your own words to convey your understanding. Empathic listening is rephrasing the content and reflecting emotion to show the person you can see the situation from their perspective. Active listening is demonstrating through words and body language that the person has your full attention and understanding.
Additionally, it is important to engage in a discussion rather than a cross-examination-style question and answer session so mediation participants will be encouraged to speak and not feel as though they are being interrogated. Making sure they are advised of the confidential nature of the proceeding is also crucial so they are aware that they are in the ideal forum to resolve their dispute.
Optimizing Caucus
Mediation is the parties’ process, and they need to feel secure in the mediation setting in order to freely negotiate and engage in constructive dialogue. Before a mediation session begins, the mediator should inquire as to the participants’ preference regarding caucusing. In cases involving deeply personal claims such as sexual harassment and sexual assault, the parties almost always opt to mediate via caucus rather than in a joint setting.
The mediator should use caucus time to listen to each party, empathize, and connect with them. Caucus provides a critical opportunity for the mediator to establish a relationship of trust with the parties and empower them, showing them that their interests are acknowledged and validated. It is also the opportunity for the mediator to explain that the other side has a different version of the facts that must be considered as well. When parties are separated it is easy for them to dismiss their adversaries’ positions and belittle their claims and defenses. The mediator needs to help the parties understand that the other side has valid points and strong convictions too, even if they don’t agree with them.
All mediation participants can maximize the benefits of the mediation process by working closely with the mediator to ensure their interests and priorities are known and conveyed. In caucus, attorneys should relate all the issues they wish to mediate and clearly explain their client’s positions. They should also equip the mediator with the questions they want asked of the other side and advise as to the information that is still outstanding and issues that need to be clarified.
Setting Realistic Expectations
Attorneys need to take the time to properly prepare their clients in advance of the mediation and realistically set their expectations. When parties enter mediation with very little knowledge of the realistic value of their case and have high expectations of “winning,” it takes longer to work everyone into a productive session and a mediated resolution becomes far more challenging. Negotiating numbers need to make sense and parties should be prepared to justify them. If a party cannot adequately explain or substantiate a monetary figure, the mediator cannot be expected to sell it.
If attorneys have oversold their positions, it will be difficult for their clients to adjust their numbers at the mediation table even when they learn new information and additional interests emerge. However, if attorneys have primed their clients to be flexible and open-minded entering the mediation, they will more likely be receptive to gaining new insights and exploring a myriad of settlement possibilities. When the end goal is shifted to finding an outcome that all sides find fair and reasonable, the tone of the session changes from combative to collaborative.
At the outset of negotiations, it is important to note that opening numbers are not indicative of the success or failure of the mediation. Complainants should not be offended by lowball starting offers, and defendants need to resist the urge to walk out if they receive demands “in the stratosphere.” Initial negotiating figures are part of the mediation process. When a skilled mediator is allowed to work their magic and take the parties through the full mediation, it is amazing how often seemingly unresolvable disputes can turn into mutually satisfactory settlements.
Benefits of Early Resolution
Attorneys and mediators need to help parties understand that by settling their employment disputes early on, they can yield a significant savings of time and money along with less disruption to their businesses and lives. Prompt resolution avoids unnecessary expense and exposure, especially in contentious matters such as sexual harassment where fee-shifting, emotional distress, and punitive damages awards are real risks.
During the mediation session, the mediator can help the aggrieved party focus on the value of closure. If the party proceeds with litigation, they face the prospect of reliving the event in the courtroom, potentially paying the costs of a full trial, and ending up with nothing, or far less than a mediated settlement. However, with the aid of the mediator, that party could instead focus on a positive outcome and envision their future when the case is over, giving them added motivation to settle.
A mediator can also be instrumental in helping defense attorneys get a better feel for what their clients’ priorities are and whether it makes sense for them to continue with years of litigation or eliminate their risks early. In sexual harassment cases with ugly allegations, businesses have to consider whether they can afford the public exposure of such claims and the adverse impact on morale and performance. If cashflow or finances are a concern, they must also determine whether it is a battle worth fighting, or whether their time and energy could be better spent on increasing productivity and growing their business.
No one can predict whether a case will result in injunctive relief, noneconomic damages, punitive damages, or eye-popping emotional distress awards, but these are some of the factors that must be considered in litigating sexual harassment claims. A professional mediator will help all parties benefit from a customized mediation process that aims to avoid the inherent risks associated with trial.
Confidentiality and Tax Issues
One of the main advantages of mediation is the confidentiality that it affords. During the mediation itself, mediators will not share information with the other side if they are instructed to keep it confidential and will only relate what they can safely disclose. If a settlement is reached and the parties elect not to discuss the terms of the deal, a nondisclosure agreement (NDA) will be incorporated into a written agreement.
In the context of employment mediations, an NDA was a standard part of a settlement agreement until enactment of the Tax Cuts & Jobs Act (TCJA) effective on January 1, 2018. Under the TCJA, deductions are no longer allowed for settlements or payments related to sexual harassment or sexual abuse if the settlement or payments are subject to an NDA. While this new act aims to stop secret settlements that have allowed sexual predators to remain hidden from law enforcement and the public, it puts employers in the position of having to choose between nondisclosure and deductibility. Employers who enter into the settlement of a sexual harassment case can no longer deduct the settlement if they want to keep the matter confidential, and neither side can deduct attorneys’ fees.
Thus, in resolving employment claims dealing with sexual harassment, mediators and counsel should make certain that the parties understand their settlements have tax implications and know what they can deduct, exclude, and report to the IRS prior to signing an agreement.
Conclusion
Mediation is an ideal early dispute resolution forum for emotionally charged matters such as sexual harassment in that it can be tailored to the specific needs and goals of the parties and provide the aggrieved party with a safe environment and outlet for their emotions. Mediation is gaining ground with employment lawyers on both sides of the bar as they recognize the value of settling early, minimizing the costs and uncertainties of trial, and avoiding the potential for fee shifting and runaway damage awards.
