By Darren P. B. Rumack, Esq.

As attorneys representing parties in employment cases in New York federal court are aware, odds are good that the case will wind up at mediation, often very early in the litigation (whether by choice or not). The most recent data from two of the busiest federal courts is clear: mediation of employment law claims is growing rapidly. Since 2011, the Southern District of New York (SDNY) has automatically referred all employment discrimination cases to mediation.1 A report from October 2023 demon-strates an increasing use of mediation in SDNY employment cases. For example, in 2021, 1483 cases were referred to the SDNY’s mediation program, nearly half (44%) of which were FLSA, employment discrimination and § 1983 claims.

In 2022, 1,550 cases were referred to the SDNY’s media-tion program, 36% of which were FLSA, employment, and § 1983 claims. Similarly, in the Eastern District of New York (E.D.N.Y.) in 2023, cases filed under the FLSA constituted about 8% of the total civil filings in that district.3 In 2023, 59% of all FLSA cases filed were referred to mediation. FLSA referrals made up 52% of the mediation referrals in 2023 and 65% of the FLSA matters referred to mediation during the period of this report were resolved before or as a result of a mediation session. Employment discrimination cases were the second most common type of case referred to the EDNY mediation program; 60 cases referred to the mediation program were employment discrimination matters.

From January 1, 2023, through December 31, 2023, 63% of employment discrimi-nation matters referred to mediation were resolved before or as a result of a mediation session. When asked why mediation was unsuccessful, one of the most common reasons mediators cite is insufficient in-formation exchanged by the parties ahead of the mediation. Without sufficient information exchange, it is difficult for parties to properly assess their litigation risks and be able or willing to move toward genuine compromise. For example, in a discrimination case, how can employee’s attorney advise their client that the employer has well documented reasons for their termination if the employer does not produce write ups ahead of the mediation? Conversely, how can an employ-er’s attorney advise their client that the employee has a high backpay claim if the employee does not disclose whether they found new employment?

In reality, the parties have many tools at their disposal to procure sufficient information ahead of the mediation session. Though not a guarantee that the parties will reach settle-ment, sufficient information exchange gives the parties more information and greater likelihood of a better decision-mak-ing process. There are a number of practical steps parties can follow to guide their document production even before the mediator in directly involved in early mediation.

1. Follow the Protocols

Attorneys often defend their lack of production by point-ing out that the mediation was scheduled before the start of discovery. Not only is this approach self-defeating, it is also incorrect. The easiest way for counsel to avail themselves of proper discovery is to follow the protocols of the court. For example, the SDNY has discovery protocols for employment cases already in place, which set out exactly what documents must be produced ahead of the mediation.4 Moreover, some judges also maintain specific discovery protocols for FLSA cases.

Court-mandated discovery protocols are designed to help the parties evaluate their case and consequently facilitate set-tlement. Counsel can rely on these protocols to have their cli-ents produce sufficient information for their adversaries and vice versa. It is worth keeping in mind and reminding clients that the documents required for production will come out during the course of discovery anyway should the mediation not succeed, so the parties may as well produce them prior to the mediation.

2. Use the Mediator

To be clear, the mediator is not a discovery referee and does not have the authority to resolve discovery disputes. It is always helpful for the attorneys to communicate directly with each other if there are specific documents that they are seek-ing ahead of the mediation. However, if there is uncertainty as to what documents to produce, a conversation with the mediator may be useful – especially ahead of the mediation. The mediator can also ask whether counsel have looked at the protocols and say that the purpose of the exchange now is to assure a productive mediation.

Separately, during the mediation, one party may not wish for the other party to view a specific document for whatever reason. Although the other party may be skeptical as to the secrecy, one option is to show the document to the mediator and let him or her paraphrase the contents in caucus to the other side.
I have served as a mediator in several cases with this scenario, where one side did not want to produce specific documents (such as bank statements or medical records) for their adversary’s review during the course of the mediation. Putting the wisdom of this approach aside, I was able to paraphrase the contents of the documents to the other side to facilitate discussion. Obviously, the opposing party may draw their own conclusions when a document is specifically withheld, but this is another option to prevent the mediation from getting stuck on a specific piece of information.

Court-mandated discovery protocols are designed to help the parties evaluate their case and consequently facilitate set-tlement. Counsel can rely on these protocols to have their cli-ents produce sufficient information for their adversaries and vice versa. It is worth keeping in mind and reminding clients that the documents required for production will come out during the course of discovery anyway should the mediation not succeed, so the parties may as well produce them prior to the mediation.

3. Share Portions of the Mediation Statement

One option for parties to consider is agreeing to share portions of their mediation statement with opposing coun-sel. While most mediation statements are confidential, sometimes sharing your mediation statement may be benefi-cial and may narrow points of contention or clarify areas of disagreement. It may also highlight issues that can be clari-fied with clients ahead of the mediation, leading to a more productive session.

4. Ability To Pay Documents

A frequent barrier to settlement is the “ability to pay” issue. During mediation, it is not uncommon for defense counsel to assert that their client simply does not have the money to fund a large settlement. This is more frequent in FLSA cases where insurance coverage is rare.

When inability to pay is raised, plaintiff’s counsel will naturally want to see documents supporting that assertion. Supporting documents run the gamut from tax returns to bank account statements and beyond. However, the time to produce and review these documents is not at the mediation itself.
First, parties are rarely able to secure these documents during the mediation. Frantic calls to accountants rarely lead to tax filings being sent over in time. Second, opposing counsel is unlikely to take the documents at face value without having adequate time to review them and discuss with their client. This holds up the mediation and often requires a follow-up session.

It is worth noting that plaintiff attorneys are generally not persuaded by tax returns alone, especially in mainly cash businesses, and may require other documents to support an inability to pay claim. Again, in this situation, the attorneys should discuss the matter ahead of the mediation, not during the mediation itself.

Conclusion
Employment law mediations can be difficult and drawn-out negotiations, especially if the parties do not have suffi-cient discovery to evaluate the case. Effective information ex-change can lead to a more productive and efficient mediation process for parties, their counsel and the mediator.