After an EEOC charge is filed, the EEOC may elect to hold mediation at their offices if both parties are willing. Mediation may resolve the dispute without the need for litigation. To improve the chance of a successful resolution, both parties need to have reasonable expectations, come prepared, and consider factors other than monetary terms. It is recommended that both parties engage an experienced employment law attorney.
The type of claim determines what an employee can potentially recover in damages. For discrimination claims an employee can generally recover lost wages, punitive damages, emotional distress damages, and attorney’s fees. There are caps that apply to punitive damages and emotional distress damages depending on the size of the employer.
Employees need to prepare a mediation statement summarizing their claims, as well as their damages. Having a detailed summary of damages is very important. Generally, the employer knows facts supporting liability. The employer, however, does not know what damages the employee claims to have suffered. The employee needs to provide that information.
Employers need to prepare a detailed position statement outlining their defenses including relevant documentation.
Valuing the Claim
There are no bright line rules for what a claim is worth. Claims are fact intensive, and there are many factors to consider. For employees, one key factor is the amount of lost wages, including whether the employee made reasonable efforts to find a similar job.
Employers may want to consider whether a jury may award punitive damages and/or damages for emotional distress. Employers also need to consider whether the employee sought medical treatment for their emotional distress; whether other life factors, such as bankruptcy, death, or divorce, might have been stressors for the employee; and whether a jury would be angered or outraged by the employer’s conduct. Employers also need to know the statutory caps that apply to damages.
Non-monetary Terms of Settlement
There are items that are important to both the employer and employee beyond financial considerations. Both the employer and the employee should give careful thought as to non-monetary terms of settlement. This could include a mutual non-disparagement provision where both parties agree not to say anything negative about each other. It could be a neutral reference where the employer agrees to only provide dates of employment and position held when called for a reference on the employee. Even a generic letter of recommendation may be an option. If there is any release of claims, the release should be mutual.
If the parties reach an agreement at the EEOC mediation, the mediator will write down the material terms of settlement. Those terms become a binding agreement. The parties will work with their attorneys to execute a more detailed agreement. It is important that neither party tries to back out of the binding mediation agreement. If so, the other party could sue for breach of contract and recover their attorney fees if successful.
Are Mediations a Good Idea?
Terminations are upsetting for both parties. Obtaining closure and finality is an important consideration. The employee may not get all the financial compensation they could potentially recover in a lawsuit. The employee will, however, get a quicker resolution without having to incur additional attorney’s fees. They will also spare themselves the emotional trauma and significant time required to pursue a lawsuit. Employers can also save on money on attorney’s fees and avoid the loss of productivity. Employers can also obtain finality and focus on running their business.
Do Parties Need an Attorney?
Both parties should have an experienced employment law attorney represent them at any EEOC mediation. The attorneys will keep the parties focused on the facts and issues that matter, without delving into emotional side issues that have no relevance. Attorneys can also help identify all of the non-monetary terms of settlement and ensure the final agreement doesn’t contain any “gotchas.”