A Focused Statement Can
Ease Employment Mediation

On Jan. 9, the U.S. Department of Labor announced its final rule regarding whether a worker is an employee or an independent contractor under the federal Fair Labor Standards Act. Effective March 11, the new rule rescinds the Trump-era independent contractor rule with a six-factor test.

Attorneys anticipate a flurry of new federal employment litigation over employee misclassification, and with these increased filings, a significant number of these cases are likely to wind up in mediation.

The most recent data from two of the busiest federal courts suggest that mediation of employment law claims is growing rapidly. Since 2011, the U.S. District Court for the Southern District of New York has automatically referred all employment discrimination cases to mediation.[1] A report from October 2023 demonstrates 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 of which were FLSA, employment discrimination and Section 1983 claims.

Title 42 of the U.S. Code, Section 1983, is a federal statute that permits people to sue certain government entities and those entities’ employees for violations of their civil rights. In 2022, 1550 cases were referred to the SDNY’s mediation program, 36% of which were FLSA, employment, and Section 1983 claims.[2] Similarly, in the U.S. District Court for the Eastern District of New York in 2021, FLSA cases constituted 46% of the mediation referrals, or 424 cases overall, with employment discrimination cases being the second most common type of mediation referral, or 83 cases overall.[3]

As a result, for attorneys representing parties in employment cases, whether in New York federal court or elsewhere, odds are their case will wind up in mediation at some stage of the litigation. Given the widespread use of mediation in employment cases, there are several steps that attorneys can take to craft mediation statements that efficiently assist the mediator, and advance their clients’ interests.

Having mediated more than 50 employment law cases since 2020, I have seen that mediation statements are often given short shrift. Indeed, some attorneys do not bother to draft one at all. Whether it is an attempt at cost-savings or forgetfulness, attorneys who don’t provide mediation statements do so at their own peril. A focused mediation statement can help narrow the facts and save time — and costs — during the actual mediation by giving the mediator the tools they need to lead a productive negotiation.

Take your emotions out of it, not your clients.

Employment law disputes are inherently emotional because they typically arise from a breakdown in the employer-employee relationship.

Generally, employees feel wronged or cheated in some way, which led to filing a lawsuit in the first place. Similarly, employers are generally aghast at being accused of any form of malfeasance — let alone harassment, discrimination or wage theft.

One of the common refrains I hear from employers during mediation sessions is their shock at being sued. The employer will often argue that they treated the plaintiff well when they were employed by the company.

If their client has particularly strong emotions heading into a mediation session, attorneys should highlight that in their mediation statement. That way, the mediator is aware of any emotional factors that may act as a barrier to settlement.

After all, these psychological barriers can sometimes impede a potential settlement more than the dollar amount.

Conversely, attorneys should keep their own emotions of out the mediation statement. Telling the mediator how awful the opposing party, or their attorney, is will generally not move the ball toward resolution and will often detract from the claims — or defenses.

Further, it can negatively affect the author’s credibility with the mediator, who will likely ignore the ad-hominem attack anyway.

Never ignore a case’s weaknesses — attack them head on.

Attorneys may come into a mediation with certain expectations, only for facts that come out that completely alter their negotiating position.

For example, I have seen wage and hour cases where the plaintiff alleges to have worked a vast number of overtime hours every week, only for defendants to disclose at the mediation that they have evidence the plaintiff was working for other employers at the same time, meaning the alleged overtime hours are slightly exaggerated.

Sometimes the surprise facts can scuttle negotiations entirely.

However, if the plaintiff’s attorney was aware of these facts going into the mediation, it is important to divulge those issues in the mediation statement.

It only adds to a party’s credibility in the eyes of the mediator if they are able to acknowledge their own weaknesses and address them as best as possible ahead of time.

Show your work on damages.

During a mediation scheduling call, I always ask the parties to share their damage calculations prior to the mediation.

In wage and hour cases, an Excel spreadsheet that breaks down alleged hours worked and hourly pay assumptions is helpful, because it allows the parties to make modifications to their assumptions during the mediation session to reflect different damages ranges.

Additionally, breaking down damages by backpay, liquidated damages and other statutory damages helps convey a negotiating range, including a best-case scenario for both sides to focus their negotiations.

Similarly, in an employment discrimination case, dividing damages calculations in the mediation statement between backpay, emotional distress, punitive damages, etc., can help the parties navigate the different damage buckets and exposure risks when exchanging demands. Simply extending a one-sided settlement demand without any explanation behind the numbers does not in and of itself help the mediator in moving negotiations forward.

Conclusion

Employment law mediations can be difficult and draw out negotiations. A well-crafted mediation statement that focuses on the key issues, strengths and weaknesses of a claim can help alert a mediator as to the key disputes and barriers to a settlement. This can lead to a more productive and efficient mediation process for parties, their counsel and the mediator.

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[1] In October 2016, the SDNY expanded the automatic mediation referral program to include FLSA and Section 1983 cases filed under certain judges. FLSA Announcement and Order_0.pdf (uscourts.gov). 

[2] October 2023 Southern District of New York’s Final Report of the Mediation Program (October 2023). 

[3] EDNY ADR Final Report January 1, 2021 – December 31, 2021,

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A Focused Statement Can Ease Employment Mediation