Tag Archives: litigation

J. Anderson Little on “Making Money Talk”—an Approach to Mediation


making money talk littleI recently had the opportunity to hear J. Anderson Little speak about mediating claims where money is at stake. He has written a book, Making Money Talk, that deals with this same subject. In fact, most lawsuits involve disputes over money, and most mediations and settlement discussions are therefore negotiations over how much money one party (usually the defendant) will pay to the other party (usually the plaintiff).

I’ve written before that I am not a transformative or interest-based mediator. I tend to be more evaluative. Most former lawyers and judges who mediate tend to be evaluative. Their careers have been spent evaluating lawsuits, and they know that in many cases there is no ongoing relationship between the parties to try to preserve. These mediators leave the transformative approach to social workers and psychologists.

Mr. Little’s presentation made it clear that he eschews the interest-based approach in favor of going straight to the heart of the matter—the parties’ positions on the value of the case, which is in fact an evaluative approach to mediation. But he also emphasized that as a mediator he is not the one evaluating the case. Instead, he helps the parties and their attorneys make their own evaluations.

Mr. Little explained that parties who do not rationally assess their positions during a mediation tend to devolve into a “death spiral” that makes it harder for them to reach a good settlement. The mediator’s role is to steer the parties away from the death spiral and to facilitate their rational discussion of the case. Mediators do this by facilitating

  • the flow of information,
  • analysis of the merits of the case, its risks, and each party’s BATNA (Best Alternative To Negotiated Settlement), and
  • movement in the parties’ positions on settlement.

Mr. Little favors use of decision tree analysis to assess the likelihood of various outcomes. Litigants tend to evaluate a settlement proposal against their best case—what they perceive as total victory. But it is important for litigants to assess the likelihood of obtaining that victory, as well as the cost of doing so. I started using decision tree analysis in the mid-1980s as a defense attorney, and it always helped me evaluate my cases.

Here’s how it works:

  • A settlement offer of $500,000 may not seem very appealing if a plaintiff thinks he can obtain a $2 million verdict. But if there is only a 20% chance of obtaining that verdict, then a $500,000 settlement is a better deal than going through the risk of a trial.
  • Or, if there is a 50% chance of getting the $2 million verdict, but it will cost $1 million to get through trial, then the real value of the verdict is $1 million, and the $500,000 settlement is equal to the weighted odds of getting the verdict.

Mediators can help the parties assess their monetary claims rationally. It all boils down to leading the parties to determine their most likely outcome is if the case doesn’t settle. What is each party’s BATNA, and is there overlap between the parties’ positions? If so, how should the parties plan their settlement offers to avoid impasse and reach an agreement?

Unfortunately, too often parties send the wrong signals in their offers and counteroffers, and their miscommunications lead to impasse. Mr. Little recommends that parties have a plan based on their own assessment of the appropriate settlement range. Parties should refrain from letting their emotions cause them to punish the other party for unhelpful approaches during the mediation.

Mr. Little’s approach jibed with how I always approached settlements as a defense attorney, and how I approach damage cases as a mediator. I have always thought that lawsuits settled when the parties were equally unhappy with the settlement. Mr. Little didn’t really dispute that attitude, though he offered ways in which mediators can help the parties get more comfortable with settlements. I have not read Mr. Little’s book, but it seems like a worthwhile addition to a mediator’s library.

When do you think it is important to use an evaluative approach to mediation, and when does an interest-based approach work better?

Leave a comment

Filed under Law, Mediation

When Are Apologies Worth the Risk?


MP900387517I recently listened to a webinar sponsored by the American Bar Association section of Dispute Resolution on the power of apologies. The speaker was Ken Cloke of the Center for Dispute Resolution.

I’m familiar with apologies in the context of mediation, but beyond mediation, most of the literature on using apologies to resolve disputes is in the medical and domestic relations fields, not in the context of more general litigation or in resolving non-legal disputes. This webinar gave me the opportunity to reflect on when apologies might be helpful in a variety of disputes.

Mr. Cloke said that to be effective, apologies must

  • Contain an acknowledgment or recognition of the harm that was done,
  • Include a sincere expression of regret, and
  • Not offer any defenses or rationalizations for what was done.

According to Mr. Cloke, the apology must be be authentic and cannot legally hedged or circumspect. If the apology is defensive, it could be worse than no apology at all.

Before I go further, I want to make it clear that most of the thoughts in this post are my own. Please do not attribute anything to Mr. Cloke, and I apologize if I misstate anything he said.

1. What Impact Will It Have on Pending or Potential Litigation

Most lawyers—and I am one—are leery of apologies. Lawyers typically advise their clients not to offer apologies. There are many reasons for this reluctance, the foremost being that if a party to a lawsuit issues an apology that admits any facts or accepts any responsibility for wrongdoing, it can be an admission against interest which is then admissible as evidence in the lawsuit.

But there are exceptions. Most notably, if the apology is offered in the context of settlement discussions or mediation, then it is usually not admissible. Also, many jurisdictions now have statutes that specifically state that statements of sympathy for injury to another person is not admissible as an admission against interest. Some of these statutes are limited to the medical context (i.e., a doctor expressing sympathy that a family relative died), but others are broader.

For example, Missouri now has a statute, Section 538.229, that states:

“The portion of statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering, or death of a person and made to that person or to the family of that person shall be inadmissible as evidence of an admission of liability in a civil action. However, nothing in this section shall prohibit admission of a statement of fault.”

This is similar to the law in many U.S. states. By contrast, in Scotland, the law is much broader and states:

“In all civil proceedings, an apology made outside the proceedings in connection with any matter – (a) is not admissible as evidence of anything relevant to the determination of liability in connection with that matter, and (b) cannot be used in any other way to the prejudice of the person by or on behalf of whom the apology was made.”

In Scotland, then, a person who might be sued has far more leeway to apologize than most potential defendants in the U.S.

Before considering an apology, it is critical that you know what the law is in your jurisdiction. Consult an attorney if the matter is already in litigation, or even if you suspect that litigation could arise from the conduct for which you might apologize.

2. How Far Can You Truthfully Go?

It is also important to think about how far you are willing to go in offering an apology. Ken Cloke made it clear that apologies that are not deemed sufficient by the other side can in fact make matters worse. It is critical that the apology be sincere and show your understanding of the impact your actions had on the other party.

But are you willing to apologize unequivocally? Maybe you disagree on the facts with the person requesting an apology. For example, if you are accused of running a red light, but truly believe you had the green light, you can’t very well apologize for running a red light and causing the accident.

By contrast, if you acknowledge you were driving inattentively, and you know your inattentiveness contributed to the accident, perhaps you can apologize for your inattention. But such an apology might not go far enough, if the other person believes himself to be wholly innocent and you believe his inattention contributed to the accident also. As stated above, your apology must not be hedged. Getting defensive during your apology is probably worse than silence. Trying to apportion blame is probably not a good idea, unless you are responding to an apology to you, in which case accepting part of the blame might help resolve the matter.

So before you apologize, think about whether you understand how what you did impacted the other person. Do you regret what you did? Do you only regret how the other person experienced what you did? Your apology must be authentic.

One good question to think about that Mr. Cloke suggests is: “If I had 20/20 hindsight, would I still have done what I did?” If not, maybe you have a basis for apologizing.

But again, work with your lawyer so you know the impact on any legal claims.

3. Is There a Relationship At Stake?

I believe there is a place for apologies in disputes, particularly when there is an ongoing relationship between the parties. That is probably why apologies are often helpful strategies in domestic relations matters, particularly where a divorcing couple will need to continue to parent together for many years.

MP900341467In the business context, relationships might also need to survive the current dispute. Sometimes an apology can help resolve an employment dispute. A senior manager might say, “I am sorry that your supervisor harassed you. That was contrary to our policy, and should not have happened. We are committed to providing you and all employees with a safe place to work, and he is no longer employed.”

Or important supplier or customer relationships might be salvaged with a strong apology. For example: “I am sorry that our supplies were delivered to you late last month. We didn’t live up to our commitment, and we recognize that you in turn missed deadlines with your customers. We have learned from our mistake and are instituting improvements in our order processing.”

So, particularly if you are in a dispute with an ongoing partner, discuss with your colleagues and attorney whether you can show that the relationship is more important to you than saving face or winning a courtroom battle. Take responsibility for your errors.

In summary, consider apologies as one way to resolve disputes, when the dispute is new and perhaps has not yet escalated. But be careful, and talk with your attorney first.

Have you ever found an apology to be helpful in resolving a dispute?

1 Comment

Filed under Human Resources, Law, Leadership, Management, Mediation

Resolving Conflict in the Workplace: The Earlier, the Better


Image from Forbes

Image from Forbes

As a litigator and as a mediator, I have frequently seen workplace conflicts that have escalated beyond repair. Once a manager is convinced that an employee cannot perform, it is hard to change that manager’s mind. Once an employee believes that a manager or co-worker has engaged in harassment or discrimination, there is little likelihood of salvaging the relationship. An amicable parting of the ways is usually the most that a mediator can hope for.

This was one reason I moved from practicing law into Human Resources—I wanted to move further up the process of managing workplace problems, with the hope of fixing more of them. To some extent, I was successful. But unfortunately, I found that Human Resources comes with its own baggage. Too often HR is seen by employees as in management’s pocket and by management as ineffectual or not focused on the bottom line.

Nevertheless, I came to believe that the best chance of solving workplace problems is with direct communication between managers and employees, with HR serving primarily as a coach for both parties and a referee when emotions run too high or one party or the other steps out of bounds.

But both managers and employees often do not have the communications skills needed to resolve their conflicts. A recent article on Mediate.com, Integrating Conflict Management and Workplace Mediation Practices: A Blueprint for Future Practice, by Daniel Dana, Craig Runde (February 2015), makes this point.

Messrs. Dana and Runde suggest that mediators learn to coach their clients in how to manage their differences. The skills needed, they say, include expanded self-awareness, enhanced emotional intelligence, and improved conflict communications capabilities. Here are their suggestions:

Expanding self-awareness is typically approached by coaching, interviewing, or using assessment instruments such as the Conflict Dynamics Profile or the Thomas-Killman Conflict Mode Instrument.  When people become more aware of how they typically respond to workplace conflict, they are better able to employ constructive approaches and avoid defaulting into destructive or ineffective ones.

The human experience of conflict is replete with complex emotions, and helping clients learn to manage those emotions is of great importance for conflict management practitioners.  This includes improving awareness of what triggers one’s negative emotions in the first place and developing personal practices for managing those emotions and regaining a sense of balance.

Enhancing constructive communications involves learning about one’s behavior patterns and working on lessening the use of habitual destructive behaviors.  Those habits often escalate or prolong conflict.  Improved patterns increase the use of constructive responses, which clarify issues and develop sustainable solutions that benefit both parties.

Yet Dana and Runde recognize that coaching alone will often not be enough to manage workplace conflicts. There is still a role for neutral third parties—either internal or external mediators.

Again, following the principle that resolving a conflict sooner rather than later is the best way to preserve a workplace relationship, then internal company mediators serve an important role. But bringing in an external mediator is more effective than litigating a dispute.

What has your experience been with resolving workplace conflicts? Can people learn to handle most conflicts themselves? When is a third-party essential to resolving the dispute?

2 Comments

Filed under Human Resources, Management, Mediation, Workplace

Favorite Firing: Termination for Admitting Violation of Employer Policy Is Retaliation Under FLSA


policeman-146561_640I’ve mentioned before that retaliatory discharge claims under Title VII are hard to defend, but retaliation claims are equally problematic under other employment statutes. In Avila v. Los Angeles Police Dep’t, (9th Cir. 2014), a police officer alleged he was fired for testifying in a co-worker’s lawsuit claiming non-payment of overtime wages in violation of the Fair Labor Standards Act.

The Facts: Leonard Avila was a police officer for the Los Angeles Police Department. He testified in another officer’s lawsuit alleging unpaid overtime wages and admitted he had frequently worked through his lunch break without reporting the extra hours, in violation of the LAPD’s policy.

Shortly thereafter, Officer Avila was discharged for insubordination. The insubordination? His failure to claim overtime wages in violation of department policy.

The LAPD Board of Rights that recommended Officer Avila’s termination found:

“Prior to 2008, you [Officer Avila], while on duty, were insubordinate to the department when you failed to submit requests for compensation for overtime that you had worked, as directed through department publications.”

The Ninth Circuit opinion states the facts as follows:

“Leonard Avila, a police officer, periodically worked through his lunch break but did not claim overtime. According to his commanding officer, Avila was a model officer. The Los Angeles Police Department (LAPD), however, deemed Avila insubordinate for not claiming overtime and fired him.

“Not coincidentally, that termination occurred only after Avila had testified in a Fair Labor Standards Act (FLSA) lawsuit brought by fellow officer, Edward Maciel, who sought overtime pay for working through his lunch hours. Avila then brought this action, claiming that he was fired in retaliation for testifying, in violation of the FLSA antiretaliation provision, 29 U.S.C. § 215(a)(3). The evidence at trial was that the only officers disciplined for not claiming overtime were those who testified against the LAPD in the Maciel suit, notwithstanding uncontested evidence that the practice was widespread in the LAPD.”

The Moral: As the dissenting opinion in Avila stated, “retaliation claims based on federal statutes are increasingly a major part of employment litigation in federal courts.” That is probably the single biggest moral to be taken from this case.

The dissent focused on the fact that Officer Avila and the other officers discharged after their testimony admitted violating department policy in that testimony:

“the only officers singled out for discipline were those who testified at the Maciel action and who admitted under oath that for years they knowingly and repeatedly violated policies that they were specifically told would subject them to termination.” [emphasis in original]

The dissent argued that employees should not be immunized from the consequences of their admissions, but the majority upheld the jury verdict in favor of Officer Avila. The case focused primarily on jury instructions, and, finding no error in the instructions, the majority affirmed.

So another moral from this case is that employers cannot necessarily rely on admissions of wrongdoing by employees, if those admissions are made during lawsuits against their employer. Employers must be careful when seeking to discharge any employee who has raised any type of employment claim or participated in any way in another employee’s claim. As I’ve said before, the retaliation claims are often more difficult to defend than the underlying complaint, whether it be for illegal employment discrimination, unpaid wages, worker’s compensation, or any other employment action.

The Atkinson, Andelson, Loya, Ruud & Romo law firm, which represents employers, wrote on its blog:

“This decision is important as the Court of Appeals’ analysis suggests that an employer is restricted from exclusively using information obtained from an employee’s protected activity for purposes of initiating an adverse action.  Instead, the Court of Appeals focused on the fact that the City did not have other independent evidence of alleged wrongdoing beyond Avila’s protected activity when terminating his employment to avoid liability under the FLSA’s anti-retaliation provision. Ultimately, the Court of Appeals left open the question as to whether an employer is strictly forbidden from using any information of employee wrongdoing that is obtained during testimony in another lawsuit.”

And as Branigan Robertson, a plaintiff’s attorney, said on his blog:

“Avila v. Los Angeles Police Department is a win for employees as it shows employers that they need to be extremely careful when firing someone for complaining or being part of a legal proceeding against them.”

In my opinion, the LAPD would have been wiser to have documented a warning to Officer Avila and the others who admitted violating department policy and told them that any future violations would be grounds for termination.

Perhaps that shouldn’t be the case, but this was an expensive lesson for the department. Officer Avila received $50,000 in liquidated damages, and his attorneys were awarded $579,400 in attorney’s fees.

What do you think—should LAPD have lost this case?

Leave a comment

Filed under Human Resources, Law, Management

Mediation and Self-Determination


MP900385538The recent article by Robert Bush and Joseph Folger on Mediate.com entitled, “Reclaiming Mediation’s Future: Getting Over the Intoxication of Expertise, Re-Focusing on Party Self-Determination,”  raises interesting questions about the purpose of mediation and whether mediators are adequately pursuing that purpose or not.

1.  The Purpose of Mediation Is Self-Determination

Messrs. Bush and Folger state that their premise is “that self-determination, or what we call empowerment, is the central and supreme value of mediation. [emphasis in original]” I have always accepted that premise as well—any agreement reached as a result of mediation must be truly voluntary on the part of the parties. But the interpretation I give to party self-determination seems to be more limited than what the authors of this article have in mind.

I’ve spent more than twenty years following mediation from a variety of perspectives—as an attorney, as a party representative, and as a mediator. I agree with the authors that party self-determination is often not at the forefront of mediators’ minds. On the other hand, even mediators who are not focused on self-determination can achieve good results which satisfy the parties’ needs and interests.

The essential criterion of self-determination in my mind is the ability of the parties to walk away. Even in court-ordered mediations, the parties should feel free to abandon the process after a reasonable period of time.

But I do not believe it is wrong for mediators to push the parties toward a resolution. As long as the parties feel they have another alternative to a settlement, they are exercising self-determination to stay in the room and seek agreement.

2.  Has Self-Determination Broken Down?

Messrs. Bush and Folger list many reasons why institutional pressures have led to the premise of party self-determination breaking down in mediation. Some of their reasons are

  • Our problem-solving “culture of expertise” causes mediators to push inappropriately for agreements when the parties are reluctant
  • Mediators are now often legally required to have subject-matter expertise in the fields that they mediate (in particular, perhaps, family law)
  • Regulations give preference to mediators with legal backgrounds over those with other professional expertise, sometimes even permitting lawyers to mediate without any additional training beyond their bar license.

The authors clearly support the transformative view of mediation—which has as a goal that the parties be changed by the process as they resolve their conflict, rather than simply finding a way to reduce or avoid or compensate for the conflict. In the transformative model, resolving or “fixing” the conflict is secondary to transforming and empowering the parties.

I am not a transformative mediator. I feel no need to help the parties change. I accept that my goal is to see if they can reach agreement, and to push them sometimes toward a reasonable resolution of their conflict. But I also keep enough distance from the parties to recognize that it is their conflict, and not mine.

I tell parties that I am not a transformative mediator and that I will probably push them toward settlement. I also tell them that they are free to tell me no and to tell the other party no at any point in the process.

I have mediated disputes where I know a lot about the legal issues involved and disputes where I don’t know much at all. When I don’t know the law, I feel like I am operating in the dark with respect to helping the parties. I can still help them articulate and focus their issues, but I can’t provide any information about what might happen if they don’t settle, nor can I be sure they have addressed all the issues that are a part of their conflict. I may become more transformative as a result of my lack of substantive knowledge, but I don’t know that this is a help to the parties, who are often unrepresented by legal counsel.

However, Messrs. Bush and Folger are correct that a law degree is not a perquisite to being a good mediator. Many of the best mediators I have known have been non-lawyers—social workers and psychologists make excellent mediators because they know how to help people communicate. But the best of these non-lawyers have developed a good understanding of the legal issues in the cases they mediate.

3.  Does Mediation Need To Be “Fixed”?

Among the authors’ recommendations to re-focus the field of mediation on party self-determination are that we

  • End once and for all the fiction that evaluative case settlement is mediation—the traditional “settlement conference” mode that often passes for mediation.
  • Undertake a fundamental redesign of mediator training—rather than focusing on managing the process, mediators should focus on supporting party choice.
  • Publicize how has come to denigrate rather than promote party self-determination, which the authors believe is a prime reason for the underutilization of mediation.
  • Change the requirements on mediator qualifications to eliminate demands for mediator substantive knowledge and expertise.

I think mediation can take many forms, one of which is the traditional “settlement conference” mode. That is not a transformative process, but it is a problem-solving process and has value. Not all problems need to be resolved through transformation, any more than an exchange of money can resolve all problems.

There may be an over-reliance now on training mediators to manage the process, but a failure to manage the process can result in angry exchanges that further break down the parties’ attempts to communicate, even when the intent is to “transform” them. I would not eliminate training on managing the process.

MP900341467I came away from the article by Messrs. Bush and Folger recognizing how weak I am in transformative mediation. I acknowledge that there are disputes I should not mediate because of this weakness. Where parties need to have an ongoing relationship, such as divorced parents of a minor child, they need to come to terms with their past relationship before they can move reach a successful resolution to their conflict.

On the other hand, there are times when the parties’ time, money, and other resources are limited. A mediation designed to prod them toward quick resolution of their conflict may well be in their best interests. The mediator should make it clear throughout that the decision to reach agreement is in their hands, but the mediator may also be doing them a disservice not to push when agreement seems close.

In your opinion, should mediators pay more attention to party self-determination than most mediators do today?

1 Comment

Filed under Mediation

New EEOC Guidelines on Accommodation of Religious Dress and Grooming Practices: A Higher Standard?


"Celtic Cross (#0383)" by regan76

“Celtic Cross (#0383)” by regan76

On March 6, 2014, the EEOC issued new guidelines on what employers must do to accommodate their employees’ religious dress and grooming practices. See EEOC publication titled Religious Garb and Grooming in the Workplace: Rights and Responsibilities.  The agency takes the position that employers must accommodate these religious practices, even when they violate company policies, unless doing so presents an “undue hardship” on the employer’s business.

Specifically, Q&A 6 of the guidelines states:

“Title VII requires an employer, once it is aware that a religious accommodation is needed, to accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship.  Therefore, when an employer’s dress and grooming policy or preference conflicts with an employee’s known religious beliefs or practices, the employer must make an exception to allow the religious practice unless that would be an undue hardship on the operation of the employer’s business.”

"Turban Day 2012-15" by Anuraj Singh

“Turban Day 2012-02” by Anuraj Singh

According to the EEOC, employers must accommodate all aspects of religious observance, including not only the well-established religious practices of traditional religions (Christianity, Judaism, Islam, etc.), but also “new, uncommon” practices “not part of a formal church or sect,” and any “sincerely held” beliefs, even where they are not part of a formal church practice and even if the belief seems “illogical or unreasonable to others.” See Q&As 2 and 4.

One tricky issue for employers is the standard of accommodation to which the EEOC will hold employers. Traditionally, the standard for religious accommodation has been that employers need not agree to any accommodation that causes more than a de minimis cost or burden to the employer’s operations. Q&A 6 of the EEOC’s new guidelines pays lip service to retaining this de minimis standard:

“For purposes of religious accommodation, undue hardship is defined by courts as a “more than de minimis” cost or burden on the operation of the employer’s business. For example, if a religious accommodation would impose more than ordinary administrative costs, it would pose an undue hardship. This is a lower standard than the Americans with Disabilities Act (ADA) undue hardship defense to disability accommodation.”

EEOC sealNevertheless, the new EEOC guidelines make it clear that the following cannot be the basis for the employer’s claim of undue hardship:

  • customer preferences (Q&As 5 and 6)
  • co-worker disgruntlement (Q&As 5 and 6)
  • an employer’s desire to use a particular image or marketing strategy (Q&A 10)

If these core business considerations cannot be rationales for objecting to a religious accommodation, then an employer’s operations can in fact be significantly altered by compliance with an employee’s request for an exemption from a dress or grooming policy, contrary to the expressed de minimis standard.

It appears that the only  acceptable “undue hardship” the EEOC will recognize is one which causes and actual impact on safely, security or health. See Q&A 12. And the only example of permissible refusal to accommodate a dress or grooming requirement in Q&A 12 is requiring an employee with a beard to wear two face masks instead of one for hygiene reasons (Example 15). Even prohibiting an employee from wearing a dull knife that is a religious symbol is an illegal denial of religious accommodation (Example 19).

In many instances an employer can acquiesce to an employee’s religiously motivated requests for different dress and grooming standards with little or no hardship, and accommodating these requests is appropriate. Nevertheless, many of the examples given in the EEOC guidelines do not feel like de minimis intrusions into employers’ businesses to me. They feel like they impose a significant risk that the agency will second-guess an employers’ decisions.

And how far should the EEOC’s higher standard of accommodation be allowed to extend? What about religiously motivated speech? The new guidelines do not (yet) speak to anything more than religious dress and grooming accommodations. But there is no rationale that I can see why customer or co-worker objections to dress and grooming accommodations should be prohibited, while objections to words should be allowed.

I was involved in a situation where an employee in a retail operation insisted in answering the phone “In the name of Jesus Christ of Nazareth, this is [XYZ Department Store].” When questioned about this practice, she said that her beliefs required her to always speak in the name of Jesus Christ and to so preface her remarks.

We had many complaints from both Christian and non-Christian customers. After much discussion with the employee and her minister, the retailer ultimately terminated her employment. A court found the termination proper and granted the store summary judgment. But I wonder whether we might have been liable for employment discrimination under these new EEOC new religious accommodation guidelines, no matter how many customers we lost as a result of her statements.

What types of religious accommodation requests have you encountered in the workplace?

1 Comment

Filed under Diversity, Human Resources, Law, Management, Workplace

Favorite Firing: I Wish We Could Have Fired Her for Resume Fraud


Every so often there are news reports of job applicants who have padded their resumes to get hired or promoted. One of the most notable examples was Scott Thompson, former CEO of Yahoo, who claimed he had a degree in computer science from his college, though the college did not offer such degrees when he attended. When his misrepresentation was discovered, he stepped down from the CEO role.

Here’s another example of resume fraud from my personal experience. Technically, this situation did not give rise to a “firing”, but I wish it had.

from Wikimedia Commons

from Wikimedia Commons

The Facts: In one of the in-house legal jobs I held, we had a candidate for a paralegal position who had maintained a falsehood for years. She was a long-term employee in another department in the company who had told her supervisors that she was attending law school.

When our legal group had an opening for a paralegal to assist with document work in a large lawsuit, the Human Resources department suggested we interview this employee, whom I will call G.M. We interviewed her and she seemed to have the necessary skills, so we transferred her into our department.

In addition to document work, we thought we could use G.M. for some legal research. I asked her if she could handle a project I had. “Oh, yes,” she said.

The next day she fell out of her chair at work and incurred a back injury. The worker’s compensation case went on for months, and ultimately she left the company due to her disability.

In the meantime, however, one of the attorneys in our department was chatting with an acquaintance in the local law school’s admissions office. “We have one of your former students, G.M., working with us now,” she told the law school representative.

“Who? I don’t know G.M.” As an admissions employee for several years, this person should have recognized G.M.’s name.

Upon further investigation, we learned that G.M. had never been enrolled in law school, and had misrepresented herself to her supervisors for all the time she claimed to be in school. She wasn’t using any legal skills in her old department, so why she did this, we’ll never know. But she compounded the problem by maintaining her misrepresentation when we contacted her about our paralegal position.

And we got snookered because we didn’t do a background check before transferring her into our department. And were repaid for our naïveté when she filed the worker’s compensation claim.

The Moral: Check out the critical information in all applicants’ resumes, even if they are transferring within your company, particularly if the new position will require them to use new skills. It might be too late to check out after they are hired.

Once a situation turns litigious, as with an EEO or worker’s compensation claim, it may be too late to address the employee’s resume fraud. We had no basis for disproving that her back injury was caused by a fall out of her chair (though no one saw her fall). Under the relatively lax rules of worker’s compensation cases, the company was liable for her injury, regardless of her resume fraud.

Clearly, we wanted to fire this employee because of her misrepresentation. But the risk of a lawsuit alleging we were retaliating against her for filing the worker’s compensation claim was too great. All we could do was negotiate a settlement in the worker’s compensation case that resulted in her leaving the company.

Have you ever been caught by an applicant’s or employee’s resume fraud?

2 Comments

Filed under Human Resources, Law, Management, Workplace

EEOC Mediations: Threats or Neutral?


EEOC sealThe founder of EEO Legal Solutions, Merrily Archer, posted a column on December 19, 2013, about its survey of EEO practitioners’ experiences with mediations before the Equal Employment Opportunity Commission (EEOC). See The EEOC’s FY2013 PAR: How STUCK Employers Are, EEO Legal Solutions, December 19, 2013.

EEO Legal Solutions found that about 60% of survey respondents said the EEOC implied that they agency would investigate whether the employer had engaged in systemic discrimination, over 70% said the EEOC implied there was a serious risk of a “for cause” determination, and 80% said the EEOC told them the costs of defense would be high. For a summary of the survey, see EEOC insider reveals ‘bullying’ tactics towards employers, HR America, January 22, 2014.

Ms. Archer argues that the EEOC’s tactics amount to “bullying” or misrepresentation, because in fact the agency issues “for cause” findings in only about 3.8% of complaints, and litigates less than one case in a thousand.

The EEOC’s Performance and Accountability Report for 2013, cites its increased monetary settlements from employers, even though the number of discrimination cases filed with the EEOC had decreased. The question is whether these increased settlements are reached with appropriate tactics or not.

The Fox Rothschild Employment Discrimination blog has posted a debate between Ms. Archer of EEO Legal Solutions and Robert Young of the New York Department of Labor over the appropriateness of the EEOC’s conduct (as each of them interprets it). See Does the EEOC Try To Intimidate Employers?, by Richard Cohen, in the Fox Rothshild Employment Discrimination Report, February 19, 2014.

So, is the EEOC threatening employers in mediations or simply collecting settlements earlier in the process than has occurred in the past? I don’t think we have enough information to answer that question.

1. EEOC Mission Is To Enforce Anti-Discrimination Laws

EEOC posterTo begin with, we need to remember that the EEOC’s mission is to “eradicate employment discrimination at the workplace.” To that end, the agency will “pursue fair and vigorous enforcement where there is any form or level of employment discrimination” prohibited by the laws it implements. Where the EEOC concludes prohibited discrimination has occurred, it should vigorously pursue enforcement and remedies.

However, the EEOC is required to be fair to both employees and employers. So in addressing Ms. Archer’s points, the question is whether the EEOC is being fair to employers.

2. Settlements Are Cheaper Early in the Process

Keep in mind that if a case is going to settle, it is generally cheaper to settle it earlier in the process. If more cases are settled at the EEOC administrative level, rather than later after a lawsuit has been filed, the EEOC settlements are likely to be for less money than a settlement after a court-ordered mediation.

Some of the lower cost may be due to plaintiffs’ willingness to take lower amounts in settlement and move on with their lives (which may or may not be good for plaintiffs), but a lot of the lower cost has to do with the fact that neither side has yet incurred much in the way of legal fees and other litigation costs. Saving those costs is good for both parties—indeed, it is good for everyone except the lawyers.

So just because more cases are being settled at the EEOC level doesn’t mean the EEOC is behaving improperly in seeking those settlements. Quite likely, many of the cases the EEOC is settling would have settled later during litigation, and perhaps for more money then. Who is to say whether the employer would have been better or worse off to settle later in the process?

3. Mediation Tactics Used by EEOC

I didn’t see much in Ms. Archer’s column or reported argument with Mr. Young that indicated the EEOC’s mediation tactics were out of line.

     Arguing Defense Costs: In every mediation where I have been a defense counsel or corporate representative, the mediator pushed hard on my client and me to settle because of the potential for an adverse decision and because of the cost of defense.

I have seen federal magistrates, EEO agency in-house mediators, and independent mediators all use those arguments. I push these points myself when I am mediating employment cases to get defendants to increase their offers. If the EEOC is “bullying” employers with these tactics, then most mediators do the same thing.

The biggest issue with pushing costs of defense as a reason to settle is that the costs of discrimination litigation are borne disproportionately by employers. When the employee wins, the employer pays the plaintiff’s attorneys fees. When the employer wins, the employee rarely is required to pay the employer’s costs. But that is not the EEOC’s fault; that is the fault of judicial interpretations of the statutes.

     Evaluating the Case: Many mediators also give their evaluations of the case—to both parties—to encourage settlement. Some mediators refuse to be “evaluative,” but even those who refuse to put a dollar figure on the case will often point out the strengths and weaknesses of the parties’ cases.

And again, if the EEOC’s tactic in evaluating the case is “bullying,” then I have frequently observed federal judges bully parties into settling. One judge announced during a settlement conference where I was defense counsel what the case should settle for, in the presence of the plaintiff. After that point, of course, she would take nothing less.

Furthermore, the EEO Legal Solutions survey asked only employer representatives what they had experienced. We are only getting half the picture in this survey. It could be that the EEOC is using the similar tactics with individual complainants and their attorneys—telling them of the high cost of pursuing their case, the possibility they will lose or win very little in damages.

* * *

As I see it, the real issue is whether the EEOC can act both as a neutral mediator and also as a prosecutor of employment discrimination issues. Does the agency maintain a Chinese wall between these functions? That, to me, seems to be a legitimate issue.

Perhaps the EEOC should make greater use of outside mediators, rather than having its own employees conduct the mediations when the case is still pending at the agency.

What has your experience been during mediations of employment cases?

Leave a comment

Filed under Human Resources, Law, Mediation, Workplace

Favorite Firing: High-School Guidance Counselor Terminated for Writing Sexually Explicit Book


My recent posts in the “Favorite Firing” series have dealt with poor management decisions leading to terminations that are difficult to defend. (See here and here.) But “favorite firings” also arise when employees engage in behavior that leads to the immediate reaction “What was he (or she) thinking?” Today’s case is one of those.

teeth-dirty-old-man1In Craig v. Rich Township High School District 227 (7th Cir. 2013), a high school guidance counselor and coach published a book entitled It’s Her Fault, in which he wrote about his own sexual exploits and argued that women should be submissive and should use sex to get power in relationships.

Not surprisingly, the School District did not look favorably on this book by a man who provided guidance counseling services to students of both genders and coached young female basketball players. They fired Mr. Craig. He sued, claiming that he was fired in retaliation for publishing this book in violation of his First Amendment right of free speech. Thankfully, he lost his case, when first the trial court and then the Seventh Circuit dismissed his claims.

The Facts: Because the case was dismissed out of hand, there were no factual disputes. Mr. Craig published a book that was sexually explicit. According to the Seventh Circuit, the book repeatedly discussed sexually provocative themes and used sexually explicit terminology. Not only was it explicit in describing sexual anatomy and recommending certain practices, it also advocated that women should be submissive to men and should paradoxically use sex to secure power in relationships.

Furthermore, Mr. Craig admitted in his book that he objectified women in his own relationships, while stating that women were too emotional and unable to develop strong relationships. What young woman who read of these opinions by Mr. Craig—or of his “weakness for cleavage”—would want him as her guidance counselor or coach? Too icky.

The School District admittedly fired him because of the book and because they believed he was not an appropriate counselor for high-school children. The charges against Mr. Craig included that:

(1) the publication of Craig’s book  “ha[d]  caused disruption,  concern, distrust and confusion among members of the School District  community;” (2) Craig violated the School Board’s Policy  “prohibit[ing]  conduct that  creates ‘an intimidating, hostile,  or  offensive  educational  environment;”  and (3) “Craig failed to present [himself as] a positive role model and failed to properly comport himself in accordance with his professional obligations  as  a public teacher.

Mr. Craig claimed that his book was protected by First Amendment rights and that the School District had fired him wrongfully.

The Moral: The trial court dismissed the case, stating that Mr. Craig’s book was not a matter of public concern, and therefore was not protected by the First Amendment. The Seventh Circuit affirmed the dismissal, but used different reasoning. The Seventh Circuit said that the book was of public concern, because it dealt with “adult relationship dynamics.”

However, the Seventh Circuit agreed with the result in the trial court, holding that the School District had the right to fire Mr. Craig because of its interest in providing educational and counseling services in an unintimidating and non-sexualized atmosphere. Mr. Craig’s authoring and publishing of his book prevented him from teaching and counseling in the non-threatening environment the school wanted to create.

At the heart of the Seventh Circuit’s opinion is the language:

The school district reasonably predicted that “It’s Her Fault” would disrupt the learning environment at Craig’s school because some students, both female and male, who learned of the book’s hypersexualized content would be reluctant to seek out Craig’s advice.

It is a relief to find that the Seventh Circuit upheld the School District’s right to set the tone of its educational environment. In truth, the holding of the Seventh Circuit was stronger than the lower court’s holding. The lower court based its ruling on the specifics of Mr. Craig’s book, while the Seventh Circuit affirmed the School District’s ability to prescribe how its students are taught.

The Seventh Circuit did place limits on the School District. The court stated that it was balancing the School District’s interest in offering public education and counseling services in a non-sexual climate against Mr. Craig’s right to express himself. I would hope, however, that in future cases, school districts would be given broad abilities to structure their educational environments in ways they think most conducive to learning.

For another commentary on this case, see Paul Porvaznik’s article, 7th Circuit Dismisses Guidance Counselor’s First Amendment Suit Involving Tawdry Relationship Book (the ‘actually, please DO quit your day job’ post).

For a complete list of my “Favorite Firing” posts, click here.

What do you think of the Seventh Circuit’s opinion in this case?

2 Comments

Filed under Human Resources, Law, Management, Workplace

We Need Disruptive Invention in Our Legal System to Reduce Transactions Costs


We live in the world of disruptive invention, according to an op-ed piece by L. Gordon Crovitz published in the Wall Street Journal on January 5, titled Disruption is the New NormalHe used the example of road atlases being replaced by GPS devices being replaced by cell phones, all within recent memory. Each technological advance has reduced costs and made information retrieval easier for the end user.

What drives disruptive invention? According to Mr. Crovitz, one factor is the desire to minimize transactions costs, which the Coase theorem says drives many economic decisions. Mr. Crovitz argues that in the digital age with better pricing and product information, transactions costs are vastly diminished.

Unfortunately, transactions costs do not always improve with technology.

In fact, in that same January 5 issue of the Wall Street Journal issue was an article by Jennifer Smith, titled Companies on Guard for New Legal Pitfalls, describing challenges for general counsels in the year ahead. The high cost of regulations and litigation raise corporate risks. She states that

“Top legal officers at many large companies are preparing for stepped-up scrutiny of their operations by both regulators and private litigants as they head into 2014.”

Image from Forbes

Image from Forbes

Unfortunately, our legal system today is designed to increase transactions costs, not decrease them. In fact, digital technologies have increased legal costs more than they have decreased costs. In class actions, huge numbers of plaintiffs are recruited using customer and employee databases.  Discovery costs have mushroomed with the advent of required electronic discovery into email, hard drives, and other repositories of corporate information.

Trial courts are overwhelmed by the number of cases and the sheer volume of electronic records and paper generated in the average lawsuit these days. Overburdened judges leave it to adversarial attorneys to work out the pretrial procedures as much as possible. Unfortunately, the hourly billing mechanisms of most law firms reward doing more work on a case, rather than less. Neither plaintiff nor defense counsel have any incentive to reduce costs.

All this results in greater risk for companies of all sizes. Any firm that wants to create new products or develop new supply chains and or sell to new customers must account for these risks when making decisions. Do they know and understand all the regulations that might apply to their business? Can they foresee and protect against the threats they might face? In essence, transaction costs are increasing as a result of our legal system, not decreasing.

In my experience, both plaintiff and defense firms are guilty of these abuses. Only in-house legal departments have had any incentive to reduce the transactions costs of litigation. Until our legal system faces the same disruptive innovation that we have seen in the technology arena, the threat of lawsuits and government intervention through burdensome regulations will continue to tamp down our ability to innovate.

gavelThere have been some advances in alternative dispute regulation, through voluntary mediation and mandatory arbitration programs. These have helped to reduce costs and provide more timely resolutions of employment and consumer disputes.

But with every attempt to implement such programs, the plaintiffs’ bar raises an outcry that our rights to jury trials have been denied. But what good is a jury trial when it takes at least two years to get to trial, with attorneys on both sides of the dispute attempting to inflict pain and expense through discovery in the mean time?

More disruption is needed in our legal system. Who will lead it?

How have legal burdens impacted your business? Have you seen any improvement in recent years?

Leave a comment

Filed under Law, Leadership, Management, Mediation