Planning for a Mediation: Determining your WATNA, LLATNA and MLATNA to Get to Your BATNA


business-3152586_640Corporate executives and Human Resources professionals sometimes find themselves representing their employer during mediations. I’ve been not only a mediator, but also a corporate representative and an attorney during mediations. In all these roles, I came to see the importance of preparing for the mediation.

Just as you would for any negotiation, it is important to know what you and your company are trying to achieve. (If you’re an attorney reading this, it is just as important that you know what your client needs to achieve.

There are lots of materials written about knowing your BATNA (Best Alternative To a Negotiated Agreement) before settling a case. But how do you decide what your best alternative to settling the case is? Remember that your BATNA cannot be dependent on anything the other party in the case does—it must be something that you can control or that you think will probably happen regardless what the other party does.

Determining your BATNA can’t be done in a vacuum. It is often easier to start by determining your WATNA — the worst alternative to a negotiated agreement. Sometimes, the worst alternative is the company goes bankrupt. Other times, it’s a huge PR debacle. Or maybe the worst that can happen is only that the company loses some money, but it isn’t a significant hit to the bottom line.

Only by deciding the maximum amount at stake can you decide how important this case is, and thereby decide how much to throw into settlement. (Note that though I might talk in terms of money, there are often other important resources at stake also—reputation, intellectual property rights, etc. Those must be put in the equation when valuing the case also.)

Other important considerations in determining the BATNA are LLATNA and MLATNA. I have seen parties to mediations get hung up on the least likely outcome in the case—their LLATNA (Lease Likely Alternative To a Negotiated Agreement). They see a 2% chance of winning big, and that’s all they can focus on. But your LLATNA should not determine your BATNA.

By contrast, the MLATNA is the Most Likely Alternative To a Negotiated Agreement. It is a much more useful concept.

For example, If the outcomes to an employment lawsuit could range from the employer winning its attorneys’ fees (with a 2% likelihood of occurring) to losing $1 million plus the plaintiff’s attorneys’ fees of $150,000 (with a 5% likelihood of occurring), the MLATNA might be losing $100,000 plus the plaintiff’s attorneys’ fees of $150,000 as well as your own (with a 40% likelihood of occurring). Or the MLATNA might be winning the case, but having to pay your own attorneys’ fees of $150,000 (also with a 40% likelihood of occurring). Now you have a range to work with—the case is worth at least $150,000 and up to at least $400,000 (the damage award of $100, plus $300,000 to cover both sides’ attorneys’ fees.)

Clearly, it is important to have some advance discussions with your attorney about the range of outcomes in a case and the likelihood that each might happen. Attorneys will not commit to specific outcomes, but they should be knowledgeable enough to talk in ranges both of verdicts and probabilities. Only after assessing the possible outcomes in the case—as well as the likelihood that each might happen—can you decide what you are willing to settle the case for.

You might go with a simple weighted average of the possibilities for your walkaway point. Or you might decide that the WATNA is so bad that you will lean toward settlement at (almost) any cost short of that. Or you might feel optimistic and look only at cost of defense as the settlement value of the case. But the point is, you need to consider all the possibilities.

Once you’ve looked at the range of outcomes, what do you do?

You and your counsel should discuss your mediation strategy. Where do you want to start your settlement offer? How do you get the other party talking in your settlement range? What do you have to offer that has no cost or is of little importance to you, but very important to the other side?

Then take your planning to the next level: What do you disclose to the other party in a general session? What do you disclose to the mediator in caucus? Who should be present at the mediation to maximize your credibility and persuasiveness to the other side?

* * * * *

The purpose of this post is to emphasize the importance of planning prior to a mediation. When planning, you need to consider and evaluate the possible outcomes of the case. Then set your strategy to land you in the settlement range you desire.

But be flexible. You don’t know what you don’t know. You might learn new facts during the mediation that cause you to rethink the possibilities.

When have you planned effectively for a mediation or other settlement discussion? What worked for you?

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Delegating Too Much and Too Little, and Finding a Balance


Delegation Model 1I posted a couple of years ago about problems I had with delegation during my career. I was reminded of these issues again when I read a recent post by Mary Jo Asmus of Aspire Collaborative Services Inc., entitled “The Upsides of Delegating.”

As I wrote before, when I first began supervising other professionals on projects, I either delegated too much to them (essentially providing them with no feedback) or I delegated too little (and micromanaged their projects). I provided very little coaching, in either case. It took me several years to figure out how to provide the right level of oversight, depending on the person’s experience and ability. And to learn how to provide emotional support, in addition to the substantive support needed to reach a strong project outcome.

Delegation Model 2I once saw a diagram of four styles of delegation. The labels on the diagram have slipped my mind, and I don’t recall the source. But essentially, the diagram differentiated the styles of delegation based on the substantive and emotional support that the manager provided to his or her subordinates.

In those early days, I spent my time on the substantive side of delegating, without much involvement in the emotional side.

Delegation Model 5Over time, I became more flexible in my management and delegation style. In fact, with the seasoned professionals who reported to me in my last few years as a manager, I provided little substantive support and learned that I should vary the emotional support I gave them, based on their personalities and the difficulty of the assignments they faced.

In fact, I came to see my role as deflecting the corporate politics they faced, so that they could focus on the substantive expertise they brought to the project.

As my best boss told me often, the best way to solve a problem is to throw good people at it. And let them do their jobs, even when you would do it differently. I took those lessons to heart, though it took me time to learn to trust others more than myself.

How has your style of delegating changed through your career? Where can you improve in delegating?

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What Is the Future of HR—Business Partnership or Employee Engagement?


HR signI wrote last September about the relevance of HR in changing times. Recently, I’ve seen several articles on TLNT.com that caused me to again reflect on the future of HR.

Let’s start with a story from DisruptHR entitled “It’s Not Complicated. HR Is About the People,” dated June 20, 2018. That story presents a video by Andrea Butcher which argues that HR professionals should not necessarily become business partners, if doing so takes them away from focusing on the people. Focusing on the people drives business results, because people are what drive business results.

Then I read another DisruptHR story called “HR’s Job Should Be to Encourage Conflict,” dated June 13, 2018. In that piece, Amanda Ono says that the best employees want to learn and grow . . . and they will only do their best work if they disrupt the status quo. So HR should help them by encouraging conflict in the workplace that will change things. She proposes that HR

“Train people on what healthy conflict means. Train people on how to engage in healthy dialogue.”

This sounds like another way of emphasizing people in the organization, albeit emphasizing top talent that can influence change and improve results.

In another TLNT article, “You Can’t Build a Talent-Driven Organization Without HR,” May 3, 2018, Michelle M. Smith writes that HR is under increasing scrutiny for ineffective talent strategies and lack of a strong business perspective. The thrust of her article is that it is the responsibility of corporate leadership—not just of HR—to be focused on finding and developing top talent, but HR must support them. This, of course, is the gist of HR being a business partner.

“The CHRO [Chief Human Resources Officer] of a talent-driven organization must be a great business person, not just a great people person.”

So which is it? Should future HR leaders focus on the business or the people?

The truth is, you can’t do one without the other.

My heart is in employee relations and in developing a great place to work. But if I ignore the business needs of the organization, it will not be a great place to work. If I only focus on employee engagement, without engaging them in what the business requires, I will not be serving anyone well.

And so says Susan Gallagher, in “Fast Growth Means You Need to Pay Extra Attention to Culture,” June 19, 2018.  She writes:

“Culture is the most critical part of your talent strategy when guiding your employees through the stages of rapid company growth. Keeping your people connected to your company’s core values is essential before, after, and – importantly – during the growth period, which itself challenges your company’s beliefs and behavior.”

Although her focus is on growth, the importance of culture and employee engagement is true wherever a company is in the business cycle. Moreover, Ms. Gallagher says:

“Culture cannot be dictated from the top; it must be integrated into all levels of your management team and down through the rank and file.”

The title of this post—business partnership or employee engagement—doesn’t capture the complexity of the workplace. The right answer is . . . HR must focus on BOTH. It is HR’s role to help the organization’s leaders articulate the connection between employee engagement and business results.

As Susan Gallagher says:

“Put yourself in the shoes of different groups of employees and how they will be affected. Get granular and look at different constituencies of your workforce. . . . you want your people to be as invested in the change as you are and happy about making it happen.”

Now that sounds like a focus on employee engagement AND business partnership.

Which focus do you emphasize? Business partnership or employee engagement?

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Likely Impact of Masterpiece Cakeshop Decision on Employers


wedding-cake-3346747_640Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission (Sup. Ct. June 4, 2018), is about discrimination in public accommodations, not employment discrimination. Moreover, the Supreme Court decided the case on narrow grounds—the Court ruled against the Colorado Civil Rights Commission because the Commission had voiced remarks showing a disdain for religion. The Commission did not act as a neutral decision-maker in the dispute between Jack Phillips, the Christian owner of a bakery, and two gay men who asked Mr. Phillips to make them a wedding cake.

Therefore, it might seem that this case would have little to do with employment cases. However, employers frequently find themselves in the same position as the Colorado Civil Rights Commission—arbitrating disputes between two employees each of whom has a protected status, but whose interests clash. These disputes can relate to race, gender, age, religion, sexual orientation, or any other protected status.

Let’s just stick with religion—the primary issue in the Masterpiece Cakeshop case. I once dealt with an employment discrimination claim in which a woman was fired after she repeatedly answered the phone of her retail employer “In the name of Jesus Christ of Nazareth . . .” Needless to say, the non-Christian customers of this store (as well as many of the Christian customers) were offended to be greeted in this fashion.

At the time, the standard for religious accommodation in employment discrimination cases was whether accommodating the employee’s religious practices resulted in more than a “de minimis” burden on the employer. We successfully argued that offending our customers was more than a “de minimis” burden.

I still think that would be the result today. However, the Masterpiece Cakeshop decision makes it clear that religious practices are to be taken seriously.

In the case I described, we talked to the woman’s pastor, who told us (and her) that her church did not require her to answer the phone “In the name of Jesus Christ of Nazareth.” It’s clear under later precedents, however, that it doesn’t matter what the religious institution says, if the individual holds a sincere belief. Thus, this woman’s firmly held belief that she was called to answer the phone this way gave her protected rights, whether it was part of church doctrine or not.

And if we had belittled her in some way because of her belief or because of how she practiced her religion—as the Supreme Court found that Colorado Civil Rights Commission had belittled the cake baker—we might well have been liable for religious discrimination.

Justice Kennedy said in the majority opinion in Masterpiece Cakeshop,

“The Commission’s hostility was inconsistent with the First Amendment’s guarantee that our laws be applied in a manner that is neutral toward religion. Phillips was entitled to a neutral decisionmaker who would give full and fair consideration to his religious objection as he sought to assert it in all of the circumstances in which this case was presented, considered, and decided.”

Moreover, the Court focused on how the Colorado Civil Rights Commission treated Mr. Phillips differently than other bakers who refused to make cakes with messages opposing gay marriage—those bakers were allowed to refuse customers with whom they disagreed, while the Commission had required Mr. Phillips to bake a cake supporting an occasion his religious beliefs caused him to oppose.

As Justice Kennedy said,

“these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”

This is a tall order, but deference and courtesy on all sides is more likely to lead to a positive outcome than hostility and ridicule.

It is never easy to resolve situations when two protected interests clash. For me, the Masterpiece Cakeshop decision reemphasizes the importance of treating all interests with respect. At the end of the day, employers must choose sides, just as the Colorado Civil Rights Commission had to choose a side in this case. But all sides in the dispute should be heard and treated with courtesy and tolerance.

It would have been easy for my client to ridicule the employee who answered a business phone with an overtly religious message. But it would have been wrong. Just as it was wrong for the Colorado Civil Rights Commission to ridicule Jack Phillips and his beliefs.

When have you had to resolve a situation in which various employees’ protected rights clashed?

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Thomas-Kilmann Model (Reprised): When Compromise and Collaboration Are Difficult


How Do You Deal with Conflict? Use of the Thomas Kilmann Conflict Mode Inventory in Mediation

I’ve posted a couple of times before about the Thomas-Kilmann model depicting five modes of handling conflict (see here and here). All of us gravitate to one or two of the  five conflict management styles.

As mediators, many of us are trained to use a compromising conflict resolution style—the style in the middle of the matrix, with moderate levels of assertiveness and cooperation. Many mediators also aspire to use a collaborative style—high in both assertiveness and cooperation.

As I reflected on the various styles of managing conflict recently, it occurred to me that there are two factors which often make using either compromise or collaboration very difficult during a dispute. These two factors are (1) lack of trust and (2) demonization of the other party.

1. Lack of Trust Means the Parties Feel They Are Likely To Be Abused

In order either to compromise with another party in which each side gives up something, or to find a win-win solution (the essence of collaboration), you have to see some parity between what you are giving up or gaining and what the other side is. Without trust, it is difficult to feel that you are not giving up more than the other side or that you are gaining as much as the other side.

If there is a history between the parties which one of them believes shows bad faith by the other, then trust is minimal or nonexistent. Past inequity in the relationship makes one or both parties feel that they will probably be mistreated again.

In these situations, the mediator needs to do a lot of ground work before getting to the core issues in the dispute. Perhaps little compromises can be reached or little collaborations on minor issues can build trust, but it is likely to take time.

2. Demonizing the Other Party Destroys Incentives to Work Together

Unfortunately, in too many disputes, one or both parties views the other as evil incarnate. This might be because of the history between the parties, or it might be because their dispute involves an issue that one or both of them perceives as a moral issue (such as abortion, or restrictions on guns in schools, or the death penalty). But even economic issues can take on a moral lens (e.g., drug companies and other for-profit healthcare businesses should never make more than a minimal profit, or lawyers fees are too high, or no employee should get a larger raise than anyone else).

Once values and perceptions of morality and immorality have entered the equation, it is difficult to compromise or collaborate. The “other” becomes an evil person or entity, and ceding any ground or granting them any favors becomes repugnant.

In these situations also, the mediator must work slowly. It might take a long time to dig deep enough to find the common ground between the parties. (For example, the importance of school safety, or the need for some incentives to drug companies to encourage research into new drugs.) Discovering common values is the only way to dispel the demonization of the other party.

* * * * *

I have seen many situations where lack of trust and/or vilification of the other party’s character and intent have sabotaged a mediation. These are difficult cases. Sometimes I’ve been successful in getting the parties to come to some rational place where they can compromise, but sometimes their biases go too deep and settlement (at least for that day) is impossible.

Moreover, moving beyond compromise to collaboration is even more difficult. Only rarely do parties start at a point where they despise each other and reach a resolution where everyone wins. I think I’ve seen it happen once.

What has your experience been when mediating situations involving lack of trust or demonization of the other party?

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Dealing with Emotions as a Leader


As I’ve described in this blog, I am trained as an attorney and I am an introvert. I have always been focused on facts rather than emotions. As a result, I am not the most sensitive human being on the planet.

While this might have been a strength during most of the years I practiced law, it became a blind spot when I started managing human resources functions, particularly when I managed employee relations, which included quite a bit of employee and manager counseling.

business_fight-300x300

Image from Forbes

Early in my career, while I was still working as an attorney, I came to the realization that emotions are facts. While emotions are not tangible, they are nevertheless real. I had to incorporate the emotions of my clients, those of the parties and witnesses to lawsuits, and even the emotions of my co-counsel, opposing counsel, and the judges I encountered. If I did not successfully handle the emotional aspects of the case, I would not achieve the best result for my client.

Thus, I found myself babysitting (my word for it) witnesses in a major case, so that they were not overwrought by the time they had to testify. I listened to my clients vent when they felt they were being asked to pay too large a settlement, even when it was the rational thing to do. I maintained an even personality as much as I could with opposing counsel to diffuse their rants. I patiently explained the law to obtuse judges over and over again until they finally read the cases I had presented.

Managing my own emotions and those of others I encountered were not fun aspects of the job, but they were essential.

When I became responsible for employee relations, I realized my instincts on how employees would react to policy changes were not well-developed. If we were to communicate effectively why we needed to make these changes, I needed to find people with better instincts than I had. Fortunately, I had a man working for me who had long experience in the organization and who had excellent people skills. I learned very quickly to listen to him.

In fact, many times in my career I found it essential to let people with better skills than I had do their work. My role was to get out of their way and keep others out of their way as well.

It wasn’t about me. It wasn’t even about them. It was about getting the job done the best way we could. And that was another fact, even when it felt emotional.

A couple weeks ago, I read an article on the ever-excellent TLNT.com, “None of Us Are Rational, So Smart Leadership Means Learning to Deal With Emotions,” by Jacqueline Carter and Rasmus Hougaard, dated May 7, 2018. [Reprinted by permission of Harvard Business Review Press. Excerpted from Rasmus Hougaard and Jacqueline Carter, The Mind of the Leader: How to Lead Yourself, Your People, and Your Organization for Extraordinary Results (2018)]

Mr. Hougaard and Ms. Carter say it far better than I can:

“emotions are neither good nor bad. . . . as leaders, it’s imperative that we understand the role of emotions, so we can connect with our people, not just on strategy and tasks but also on a fundamental human level. It’s only when we create emotional resonance between ourselves and our people that we enable true connectedness. Whether we’re aware of it — and whether we want to accept it or not — true engagement happens when people feel connected on an emotional level.

. . .

“. . . If we can distance ourselves from our emotions, we can observe them more objectively. With training, observing our emotions can be like watching a movie: You’re not the movie, and the movie is not you. In the same way, your emotion is not you, and you’re not the emotion. . . .

“If we face emotions neutrally and without ego, they lose their grip.”

Even as an analytical attorney untrained in human psychology, I understood these points intuitively. Thankfully, I was able to adjust my behavior to manage my emotions and those of people around me. Emotions are facts, and I dealt with them.

When have you had to deal with emotional situations at work that were uncomfortable for you?

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Favorite Firing: When Will a Sympathetic Plaintiff Nevertheless Lose His Case?


club-2492011_640Being a judge is often a difficult role. In one recent case, Sepúlveda-Vargas v. Caribbean Restaurants, LLC (1st Cir. April 30, 2018), the First Circuit Court of Appeals clearly struggled with how the strict language of the Americans with Disabilities Act (ADA) impacted a sympathetic plaintiff. The first paragraph of the Court’s opinion contains the statement:

“No matter how sympathetic the plaintiff or how harrowing his plights, the law is the law and sometimes it’s just not on his side.”

The Facts: Plaintiff Victor A. Sepúlveda-Vargas was an assistant manager for a Burger King franchise owned by defendant Caribbean Restaurants, LLC, in Puerto Rico. Mr. Sepúlveda-Vargas was attacked at gunpoint one day while making a bank deposit for his employer, and thereafter suffered from post-traumatic stress disorder and major depression.

Plaintiff requested a transfer to a restaurant in an area less subject to crime and also requested a fixed work schedule (rather than the rotating shift required for all assistant managers at Caribbean Restaurants). His managers accommodated plaintiff’s request for a while, but later determined they could not continue to accommodate the requests. Thereafter, Mr. Sepúlveda-Vargas resigned. Thus, this is technically a constructive discharge case, rather than a firing.

The District Court concluded that Mr. Sepúlveda-Vargas was not a qualified individual under the ADA, and therefore did not need to be accommodated. The lower court also concluded that the defendant employer had not retaliated against the plaintiff to create a hostile work environment justifying his resignation. As a result of these findings, the District Court granted defendant’s motion for summary judgment.

Specifically, the District Court found that working rotating shifts was an essential function of the assistant manager job with Caribbean, and, since Mr. Sepúlveda-Vargas could not work rotating shifts, he could not perform the essential functions of the job and was therefore not a qualified individual under the ADA.

The District Court recognized that even if the plaintiff was not a qualified individual under the ADA, the employer was obligated by law not to retaliate against the plaintiff for raising an ADA claim. Then the District Court addressed a long list of alleged retaliatory acts. The District Court stated that these did not rise to the level of actionable behavior by the employer.

A panel of three judges on the First Circuit looked at the alleged retaliatory behavior de novo, but agreed with the lower court’s findings. Thus, Mr. Sepúlveda-Vargas did not state a viable claim against Caribbean Restaurants, and the First Circuit affirmed the District Court’s ruling against Mr. Sepúlveda-Vargas.

The Moral: To be frank, if the District Court or Circuit Court had really wanted to, I think the judges could have ruled in Mr. Sepúlveda-Vargas’s favor, at least on the retaliation claim. Among the allegations made were that Mr. Sepúlveda-Vargas was scolded for requesting an accommodation, that he was forced to drop his pants to prove to his manager that he had a skin condition, and that he was called a “cry-baby” several times by his supervisors, . . .

While the District and Circuit judges in this case explained their rationale for not finding these allegations to amount to an actionable case for retaliation, other judges have found retaliation on facts no worse than those Mr. Sepúlveda-Vargas alleged.

From an employer’s perspective, it is heartening to see both a trial court and an appellate court follow the statutory language of the ADA in finding that an employee has not stated a cause of action. The judges gave the employer great deference in designing the job requirements for its assistant managers. It is also heartening to see the judges parse through allegations of retaliation and conclude that the alleged behavior was insufficient to support a constructive discharge case.

In this case, the First Circuit stated:

“Not all retaliatory actions, however, suffice to meet the ADA’s anti-retaliation provision. Rather, ‘a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.’ [citations omitted] Indeed, we have explained that ‘[f]or retaliatory action to be material, it must produce “a significant, not trivial harm,”’ [citations omitted], and that ‘actions like “petty slights, minor annoyances, and simple lack of good manners will not [normally] create such deterrence.”‘ [citations omitted]

But these cases often boil down to questions of fact. The decision could go either way, depending on the decision-maker. So this case is a strong reminder that employers should (1) engage in a respectful dialogue with an employee who requests an accommodation and (2) avoid retaliatory behavior after the request for an accommodation is made, whether it is accepted or denied.

When have you seen an employer prevail in a retaliation claim?

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