Always Counter: The Art of Negotiation in Mediation

Mediation is all about reaching a deal acceptable to all parties. And, at the core of every good deal is a constructive negotiation. This doesn’t mean you need to be an expert negotiator to achieve your goals in mediation. You do, however, need to know a few basics.

Check Your Pre-Conditions at the Door

One of the most damaging things you can do is begin negotiations with pre-conditions. When you have firm pre-conditions, you’ve drawn a line in the sand before the first word is ever even uttered. This instantly builds a wall and puts the other party on the defensive. It also closes your mind to new ideas and creative possibilities.

Let’s say, for example, that you’re mediating a special education due process claim. If you come to the table with the firm condition that your child MUST be placed in a non-public school, you’ve already built a barrier. You are acknowledging you’ve left no room for negotiations and refuse to hear other ideas. This approach will get you nowhere fast.

Take Bite-Size Pieces

Another unproductive approach to negotiations is to tackle the dispute as a whole. A much better process is to divide the dispute into smaller pieces and address them. Often it is easier to obtain agreement on the key issues after doing so on less important points.

Consider an employment dispute where the major issue is, typically, money. Perhaps a plaintiff suing a former employer would be willing to accept less money if the employer were willing to provide a positive letter of reference or otherwise address the employee’s concern over the future.

Empty Threats and Lines in the Sand

One of the worst negotiation tactics you can employ is to tell the other party that you’ve reached “the bottom line” if you really have not. In other words, don’t draw a line in the sand unless you’re truly ready to walk away for the last dollar.

To illustrate the power of a standing firm once you characterize a proposal as a “final offer,” I often tell parties the true story of my wife’s experience at a car dealer. We had gotten an unsolicited offer from the dealership to trade in her car and upgrade to a new model. We agreed that if we could trade in the car and spend up to $10,000 to get something she wanted, we would do it. She handled the negotiations herself. At the end of a few hours, the best deal offered would have cost her $10,050. So she walked out. Sure enough the dealership later called her and asked her if she’d be willing to come back. The owner had, as it happened, come to the store from out of town and found out about the lost deal. When my wife returned, he was there, pulled $50 out of his pocket and said, “Do we have a deal?” She drove home with her new car. Imagine walking away from a negotiation like this over fifty bucks. That’s the meaning of “bottom line.”

I spent part of my career in labor relations negotiating many contracts with many different unions. The team of which I was a part had to deal with a history of prior management making “last, best and final offers” from which they would, inevitably back down and agree to further concessions. Our team negotiated to impasse and had several strikes all of which were necessary to reestablish the credibility of management’s claim that final really meant final.

Once you assert a bottom line position, you simply cannot make further concessions without destroying your credibility. Of course, this doesn’t mean you can never use the bottom line claim as a tactic. It simply means if the other party calls your bluff, you will have to suspend the negotiation and devise a way to make the concessions (if you are willing to do so to get a deal) without appearing to have backed away from your position. There are a number of ways to do this.

When confronted with a party who insists on characterizing its last proposal as a bottom line, I always advise making a counter offer. The worst that happens is that the party says: “I meant what I said. Final means final.” More often, however, you discover that “final did not mean final.” Even if the first party is unwilling to negotiate any more at that time, the likelihood is that your counter offer will keep the conversation going and tell the other party a deal can be worked out.

Two Keys to Resolving Disputes

Mediation is about resolving disputes in a fair, cooperative, and sustainable manner. But a mediator’s job is not to resolve the parties’ dispute for them. Rather, a mediator’s job is to clarify issues, facilitate understanding of opposing positions, and educate the parties about the alternatives to a negotiated settlement so they can resolve their dispute on terms that work for them.

As complicated as this may seem, it is actually quite simple. There are really only two things a mediator must do to help successfully resolve a dispute.

Close the Information Gap

The first step is to make sure the disputing parties are factually on the same page.

What may start as a simple misunderstanding often grows into a full-blown and heated argument because the parties do not even agree on the most important facts and bits of information at the root of the issue. Once the initial misunderstanding occurs, the emotions take over (which we’ll discuss in a moment) and the dispute grows from there.  If it is  a litigated dispute, the metastasis is even worse.  Positions become entrenched and neither side stops to say, ‘Hey! Let’s look at what actually happened and make sure we’re on the same page about that before we continue arguing.’  Each party is far too busy defending its version of events to take a step back and start from the beginning.

A good mediator, then, will help close that gap.  I will always ask each party to provide a detailed factual summary so I can compare them and see if the parties can at least agree on the facts. Until they do that, it is fruitless to try to help them find a mutually acceptable resolution.

The results of the fact comparison are often surprising.

Often, opposing parties discover they are looking at completely different ‘facts’ or had different understandings about a core piece of information.  Only after the parties are all making arguments based on the same set of facts can the hard work of crafting a solution finally begin.

For example, in a recent wage and hour putative class action with PAGA claims alleged, the employer took the position that no employee had complained about the alleged violation.  On this basis, the employer was arguing strenuously that the discretionary penalty that might be awarded would be zero or very low because the plaintiffs would be unable to demonstrate a “willful” violation.  But this was factually inaccurate because, in fact, the named plaintiff had evidence that she had made previous complaints.  For some reason, this evidence had not surfaced prior to the mediation.  In fact, it wasn’t until fairly late in the day that I asked the question that caused the plaintiff’s side to reveal this evidence to me.  Although the case did not settle during that day, the employer at least came away with a better understanding of why plaintiffs’ counsel had continued throughout the mediation to insist on a payment far in excess of what the employer thought was reasonable.

Address the Emotions

When a conflict or disagreement arises, even a small one, human beings become defensive and, often, irrational. We immediately protect our egos and sense of righteousness by building up walls. Logic is cast aside, and emotions take over. Emotions like anger, resentment, guilt, insecurity, and fear are most common.

Until the parties can eliminate, or at least minimize, the power of these emotions, rational arguments are useless.  Parties are prone to exaggerating, bluffing, stalling, threatening, stonewalling, avoiding, and any number of other ineffective tactics based on emotion, not reason. Although this reaction is understandable because it is human nature, it also prevents resolution of even seemingly small disputes.

The mediator must address these emotions before any resolution is possible. Dealing with emotions does not mean ignoring them, dismissing them, or minimizing them.  To the contrary, a mediator must help the disputing parties work through the emotions and recognize the consequences of making decisions based on emotions instead of reason.

A key to helping parties minimize the role of their emotions in decision-making is establishing trust. If the parties are not comfortable, they will continue to build walls and use their emotions as a guard.  Once the parties trust that the mediator is truly neutral and truly interested in nothing but facilitating a resolution, the parties are generally able to listen to rational advice.  And, if two parties are addressing the same set of facts and applying rational thought, the dispute almost resolves itself.  To establish this trust, it is critical that the mediator listen to and discuss the parties’ feelings about the dispute so they feel their reaction is acknowledged and validated. The opportunity for each party to reveal his or her emotions to a sympathetic, neutral ear is an invaluable part of the mediation process.

In a recent case, the plaintiff sued the defendant for a relatively small sum of money.  The parties had been friends for nearly 40 years and the plaintiff felt a sense of betrayal.  Had the case been a simple business dispute involving this amount of money, it is likely the matter might never have been litigated.  It finally settled when the plaintiff was able to cast aside his feelings of being stiffed by a life-long friend and view the case as just a dispute over whether he was owed money and, if so, how much.  As with most cases, when parties make decisions based on facts and sound arguments instead of feelings, the dispute resolves.

Over my career, I have developed a knack for closing the information gap by asking the right questions and insisting on answers backed up with evidence.  I have also been lauded for an ability to relate to people on all different levels and thereby earn their trust.

I welcome the opportunity to help people resolve disputes of any kind whether a litigated case or any matter where conflict resolution assistance would be beneficial to those whose dispute is interfering with something important to the parties.

Please feel free to contact me through the website or by telephone if I can be of assistance.

Public Safety Officers Procedural Bill of Rights/Tolling Period

I have recently started mediating and arbitrating more law enforcement discipline cases. Bacillo v. City of LA addresses a key procedural question in such cases. The question is when is a criminal investigation no longer “pending” for purposes of evaluating when the tolling period described in the statute ends.  The court held in this case that the tolling period ends when a final determination is made not to prosecute ALL the public safety officers implicated in the alleged misconduct at issue.

In this matter, there was three officers involved in an incident so even though the discipline administered to the officer in question was administered more than one year after an informal decision had been made not to file criminal charges against him, the court found the discipline timely because it was administered within one year after the decision had been made not to prosecute either of the other officers.

Notably, the incident in question occurred in 2011.

A Renewed Plea for Civility

I recently defended a deposition for the first time in many years having become a full-time neutral about ten years ago.  My experience caused me to think about the responsibility of attorneys to adhere to standards of professional behavior and decorum.  Throughout my 30-plus year career, there have consistently been calls for restoring civility to the profession. Even some scholarly law review articles. See, e.g., Civility Codes: The Newest Weapons in the “Civil” War Over Proper Attorney Conduct Regulations Miss Their Mark 24 U. Dayton L. Rev 151 (Fall 1998) Incentivizing Lawyers to Place Nice: A National Survey of Civility Standards and Options for Enforcement, 48 U. Mich. J.L. Reform 701 (Spring 2015).  Despite the repetition of this plea, behavior seems to have gotten worse, not better.

A colleague who is active on Linked In regularly chronicles instances of asinine behavior to which she is subjected from opposing counsel and solicits input from her followers about similar incidents they have experienced.  A review of the posts is depressing.  This colleague primarily represents plaintiffs in employment cases so many of the critiques are of defense counsel.  Based on my experience over the years, however, it’s not the client, it’s the attorney.  Litigators on all sides of the fence too regularly engage in obnoxious, bullying behavior that is not proper, professional or productive.

In this recent deposition, I represented a colleague who was retained by an employer-defendant in a race discrimination case to conduct an investigation after the lawsuit had been filed.   During the course of the deposition, this lawyer referred to me on the record as “a jerk,” and “a joke.”  He derisively called me “Mr. Arbitrator/Mediator” pointing out that I had not litigated in ten years as if that meant something.  Especially given that I was not representing an opposing party, it seemed to me this young lawyer was needlessly antagonistic.

I do not claim I’ve always (or even ever have) been a role model of civility.  In fact, I quite regularly acknowledge that I engaged in obnoxious behavior during my days as a litigator although I like to think I had improved significantly later in my career.  Even during my career as a neutral, there have been times when someone has pushed my buttons and I have reacted in a way I almost immediately regretted.

This experience caused me to redouble my efforts to conduct myself as what my grandmother would have called a mensch. Given the general state of human interaction these days, I think it’s even more important for attorneys to  respect the rule of law and the judicial process.  This means respecting all participants in the process litigants, counsel, witnesses, etc.  Even in a community as large as Los Angeles, the legal world is a small place.  Relationships matter. The most satisfying moments of my career have been when I’ve had a case referred by a former opposing counsel, been hired by a party against whom I litigated, and developed meaningful professional and social relationships with former adversaries.


Court Holds Dynamex Applies Only to Wage Order Claims

In Garcia v. Border Transportation Group, the 4th Appellate District held the Dynamex independent contractor test does not apply to claims other than those brought pursuant to the IWC Wage Orders.  This seems like a distinction without a difference despite the court’s attempt to distinguish claims under the wage orders from other claims.  The real message in this case is that lawyers need to actually do their job.  In this case, although the court held Dynamex did not apply to the non-wage order claims, the court nevertheless held the plaintiff had waved those claims because his lawyer did not timely file a summary judgment opposition and the opposition that was filed was inadequate in any event.  This case does not really add much analysis to either the retroactivity issue (everyone appears to assume the decision applies retroactively when there are good arguments to be made that it should not) or the “gig”‘ economy issue.  Can an Uber driver ever satisfy part “C?”   I would still like to see the argument made that a worker cannot be considered an employee if the employer cannot compel the worker to show up for work on any given day.

No Class Certification for Uber Drivers; Must Arbitrate Individual Claims

In O’Connor v. Uber, the 9th Circuit issued its opinion in an appeal consolidating four related actions pending before the same district court. In what can only be described as a total victory for the company, the appellate court reversed the district court’s orders denying Uber’s motions to compel arbitration, orders granting class certification, and orders controlling class communications. Two Uber drivers filed the original putative class action complaint on August 16, 2013. A week thereafter, the plaintiffs filed a motion under FRCP 23(d) requesting the district our declare Uber’s arbitration agreement unconscionable or requiring Uber to provide enhanced notice and opt out provisions. The district court granted this motion. In a later proceeding, the district court held the arbitration agreement unconscionable. In April, 2015, plaintiffs moved for class certification. The district court granted class certification in part on September 1, 2015 and certified an additional subclass on December 9, 2015. In the same order, the district court certified the original class and the new subclass to pursue recovery of expense reimbursement in addition to the tips and damages for misclassification as independent contractors. The Ninth Circuit had already reversed the district court’s orders denying Uber’s motion to compel arbitration in Mohamed v. Uber Technologies, Inc. The court rejected plaintiffs’ new argument that the lead plaintiffs had opted out of the arbitration agreements on behalf of the class. Plaintiffs’ argument relied on a Georgia case arising under state law. The Ninth Circuit applied the Federal Arbitration Act and noted “an arbitration-specific rule . . . would be preempted. The court also rejected the argument that the arbitration agreements are unenforceable because the class action waivers violate the National Labor Relations Act. That issue, however, was disposed of by the Supreme Court in Epic Systems Corp. v. Lewis. The reversal of the class certification orders follows directly from the reversal of the motions to compel arbitration. The Ninth Circuit points out that the question of arbitrability is designated to the arbitrator, not the district court. Plaintiffs essentially conceded this point but argued the orders should be left in place and the action remanded to the district court for consideration of some other class that could be certified. The appellate court remanded the case for such consideration but held that leaving the existing class certification orders in place was inappropriate. Finally, the Ninth Circuit reversed the Rule 23(d) orders pursuant to which the District Court purported to control how Uber communicated with drivers. Again, this was a “no-brainer” once the class certification orders were reversed. Most of the heavy lifting in this case occurred in the Mohamed case. The additional two years of litigation did not really result in any new law. This latest case is mostly a procedural exercise in dotting eyes and crossing tees. According to one article: “A lawyer for drivers suing Uber said that since the ability to sue en masse has been removed, her firm is prepared to bring thousands of drivers into individual arbitration with Uber.”

Always Support Assertions with Citations

This is first-year law school stuff.  But the 4th Appellate District devoted a lengthy footnote to this basis proposition in Fierro v. Landry’s Restaurant Inc


In summarizing the factual and procedural background, both parties failed to support numerous factual assertions with citations, or at times accurate citations, to the record on appeal as required by California Rules of Court, rule 8.204(a)(1)(C). Our independent review of the record on appeal has not helped in finding support for some basic and many extraneous facts contained in the parties’ briefs. Absent a party’s accurate record reference or our independent verification, we have not considered the party’s factual recitation. (Rybolt v. Riley (2018) 20 Cal.App.5th 864, 868 [appellate courts may ” ‘disregard any factual contention not supported by a proper citation to the record’ “]; County of Riverside v. Workers’ Compensation Appeals Board (2017) 10 Cal.App.5th 119, 124 [appellate courts ” ‘ignore’ ” factual statements without record references].) An alternative basis that supports the same result is the rule that we are unable to accept counsel’s argument on appeal as facts. (See In re Zeth S. (2003) 31 Cal.4th 396, 414, fn. 11 [“the unsworn statements of counsel are not evidence”]; Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 454 [“unsworn averments in a memorandum of law prepared by counsel do not constitute evidence”].)

More important than the slap on the wrist footnote is today’s decision by the California Supreme Court to grant review and transfer back to the Court of Appeal with directions to vacate its decision and to reconsider in light of China Agritech, Inc. v. Resh

This means the Court will have to reconsider its order reversing a trial court’s sustaining defendant’s demurrer without leave to amend on statute of limitations grounds.

The underlying issue is a fairly complicated and esoteric procedural issue.  The footnote quoted above addresses a more quotidian problem and provides some useful citations.

California May Ban Compulsory Arbitration Agreements

On August 22, 2018, the California Senate voted to approve AB 3080 a bill that bans mandatory arbitration agreements for all claims of employment discrimination, retaliation, and harassment, as well as wage and hour claims. The bill is currently on Governor Jerry Brown’s desk, awaiting his signature or veto. If signed, the new law would apply to any employment contracts “entered into, modified, or extended” on or after January 1, 2019.  The bill contains other major changes to laws governing disputes arising out of the employment relationship.  For purposes of this post, I focus only on the ban on arbitration agreements.

The arguments against compulsory arbitration agreements are well known.  In October 2015, the New York Times ran three-part series with articles entitled entitled Arbitration Everywhere, Stacking the Deck of JusticeA Privatization of the Justice System and In Religious Arbitration, Scripture is the Rule of Law.

Naturally, The Times used anecdotes to run through the parade of horrible wrought by subjecting unwitting consumers and employees to compulsory arbitration.

As one who makes a living as a neutral, I am, of course, biased in favor of arbitration.  This is not to say that some of the concerns are not legitimate.  But, for every concern raised about arbitration, I can find a comparable concern about the judicial process.  The real issue is, of course, money.

Plaintiffs’ attorneys, consumer advocates, and others who most strongly oppose arbitration are in my view, primarily concerned with their own financial stake in litigation.  There’s nothing wrong with this. As an arbitrator, I am concerned that banning compulsory arbitration agreements will adversely affect my income.  But let’s not harbor any illusions that most of the opposition to compulsory arbitration has much to do with concerns over the fairness of the process.  Arbitrators are far less likely to award individuals tens of millions of dollars in emotional distress and punitive damages than are juries.

Don’t believe me. Try a thought experiment.  Ask your favorite consumer attorney if she would support a system where a jury determines liability but a judge awards damages. Or, how about a system where punitive damages go to the state?  Employment cases tried before arbitrators are “less valuable” because the downside risk to the employer is much less than it would be if the same case were tried to a jury.

In any event, a ban like that included in AB 3080 is, most likely, preempted by the Federal Arbitration Act.  The preemption argument is well made in this letter submitted by Carothers DiSante and Freudenberger LLP.

Let’s see what Governor Brown does.  We know what Governor Newsome will do if he gets the same bill next year.

Should Dynamex ABC Test Apply Retroactively?

In what is, apparently, the first widely disseminated ruling, one court has already answered the question of whether the newly-established ABC test for determining independent contractor status in claims under the California Labor Code should be applied to pending cases with a resounding “yes.” Judge William Claster of the Orange County Superior Court ruled in Johnson v VCG-IS, LLC, No. 30-2015-00802813-CU-CR-CX (Cal. Super., July 18, 2018) that the new Dynamex “ABC” test should apply to this pending case in which exotic dancers working at Imperial Showgirls in Anaheim have been classified as independent contractors.  I wrote a column on this issue for the Los Angeles Daily Journal.  We are prohibited from publishing it here but the column points out some problems with Judge Claster’s analysis.  We also won’t take a position on the issue but there seems to be a good argument that the decision should not apply retroactively.  We will continue to monitor this issue.

Starbucks Forced to Compensate for Regular Tasks Performed at End of Shift

Management lawyers are already decrying another “anti-employer” decision from the California Supreme Court. But today’s decision in Troester v. Starbucks is expressly limited to its facts and, as the concurring opinions make clear:

California law does, in short, make some allowances based on considerations of practicality and reasonableness. It does not, however, permit an employer to require an employee to regularly work for nontrivial periods of time without providing compensation.

The evidence in this case was that

Starbucks’s computer software required [Plaintiff, a shift supervisor] to clock out on every closing shift before initiating the software’s “close store procedure” on a separate computer terminal in the back office. The close store procedure transmitted daily sales,profit and loss, and store inventory data to Starbucks’s corporate headquarters. After [Plaintiff] completed this task, he activated the alarm, exited the store, and locked the front door. [Plaintiff] also submitted evidence that he walked his coworkers to their cars in compliance with Starbucks’s policy. In addition, [Plaintiff] submitted evidence that he occasionally reopened the store to allow employees to retrieve items they left behind, waited with employees for their rides to arrive, or brought in store patio furniture mistakenly left outside.

The undisputed evidence was that these closing tasks required Plaintiff to work four to 10 additional minutes each day.

The District Court judge who originally granted summary judgment in this case was, presumably, at one time an attorney billing time in 6 minute increments.  Some lawyers today, many of them presumably representing employers, would likely bill $100 for a phone call lasting 6 minutes. It is hard to justify not compensating employees for “regularly occurring required tasks.”  As the opinion points out, rounding practices can easily be implemented to account for this time.  The employer focuses on the fact that the unpaid time (at the then-applicable minimum wage rate of $8/hour) added up to $102.67 for 1 shift supervisor over 17 months.  So, would paying for this time have any material effect on any given store’s bottom line?

I don’t have much of a problem with the holding in this case.  I do, however, have an issue with all the derivative claims associated with this type of case.  I also have an issue with the fact that the employer should have been entitled to rely on the DLSE policy so that the holding could have been made prospective.