Mediating Wrongful Termination Cases with Focus on Interests

1. Mediating Wrongful Termination Cases with Focus on Interests Professors Mason and Pynchon Selected Issues in ADR: Employment Spring Semester 2007

2. World of Injustice Actionable injustices * Injustices that the law will rectify are dwarfed by the injustices it will not. We generally consider non-actionable injustices to be frivolous claims. The parties’ “interests” almost always include non-actionable injustices which mediation can address.

3. Why Mediate? The Statistics (as of ’96) • median awards of $151,800 for men and $75,000 for women (between ’88 and ’95) • In 1988, the cost of litigating one of these cases averaged $80,000 per case • Studies found a general reluctance as of 1992 to terminate poorly performing employees for fear of suit. • Research on litigation in accidental injury cases shows the further litigation proceeds, the more distasteful the experience for plaintiffs (’91) • plaintiffs frequently prevail • 64 percent of the time when the plaintiffs are executives; and, • 42 percent of the time when they are general laborers

4. Types of Perceived Injustice • distributive justice, or the perceived fairness of outcomes • procedural justice, or the perceived fairness of the procedures by which outcomes are determined • interactional justice, the perceived fairness of the nuances of interpersonal treatment.

5. Why Do Employees Sue? • negative experiences with supervisors; • Belief that processes used by the supervisor are unfair. • violations of procedural justice • perceived violations of equity and distributive justice • perceived violations of interactional justice • survivors' attitudes toward their organization are strongly associated with their beliefs about the fairness of the manner in which their companies laid off other workers

6. Termination Causes Employees to Reevaluate Fairness in Working Conditions • unfair treatment carries a message of social exclusion, threatening social identity • extremely unfair treatment, carries message of rejection • Resulting loss of self-esteem provokes vendetta effect

7. the greater hardship associated with job loss, the greater impact fairness judgments have on seeking redress

8. Increased Claiming Activities • Shorter notice of impending termination increases claiming thoughts and actions. • learn of dismissal when company AmEx card is rejected at a restaurant • Learn of dismissal when return to office after lunch and find someone taking name plate off the door • Failure to provide assistance in finding new employment increases claiming thoughts and actions.

9. Naming, Blaming and Claiming • “claiming” is a multistage process. • Begins with perception that the event is injurious. • potential claimant must then blame someone other than themselves for the injury • potential claimants must possess the will, the means, and the know-how to pursue their claims.

10. Attorney Interests Though claimants' actions may be driven primarily by loss, suit will not be brought under the contingency-fee paradigm unless the attorney believes there will be a sufficient financial pay-off to justify the attorney’s time and expense.

11. Addressing the Employees’ Most Important Interests • Feelings of unfair, insensitive treatment at the time of termination had nearly twice the effect of the next most potent factor in bringing suit. • Blame was not strongly related to the claiming process • Blame affected claiming process only for those who were fired • Even then role of blame modest • Some, but slight support for proposition that certain groups are especially likely to sue • Women’s minorities’, and union workers’ reasons lay as much in perceptions of poor treatment as in perceived likelihood of success • Best predictor of willingness to file claims was highly educated respondents -- more likely to sue than the less educated

12. Can We Quench Firing’s Flame in Mediation? • people react to nuances of treatment and style at the time of termination • The quality of the dismissal will affect people’s decision to bring suit as much as termination itself. • A fair, honest, and dignified termination should substantially reduce the temptation to retaliate through litigation. • Once litigation has been filed and the case comes to us for mediation, is there anything we (or the employer) can do to make use of these insights in settlement of the claim

13. What Can Mediators Do to Help Employees Regain Self Respect? • those in the most extreme category of disrespectful treatment at termination • may well seek to use litigation to force their former employers into a negative relationship to retrieve some of the social identity lost by a demeaning dismissal. • the litigation, once undertaken, will likely continue until the employee feels some return of the social identity they lost in the termination experience

14. Non-Monetary Offers of Assistance • good treatment of laid-off or fired employees • Give several weeks advance warning • provide help in finding new employment • Give honest accounts • provide transitional alumni status when possible • provide symbols of positive regard such as letters of reference, departure gifts or parties • offer counseling to ease the psychological shock of employment termination We can’t afford a golden parachute but Stanley here is working on a nice paisley umbrella

15. Assistance with the Financial and Personal Crisis of Job Loss • extend insurance benefits • offer generous severance packages • provide financial planning services • Offer ombuds programs • Referral services • Job re-training resources • Revamp personnel policies • Name something after the person; retire his employee number; give certificate of merit, etc.

16. You Didn’t Think We’d Ignore the Employer Did You? • Interests • Fear of other claims following this one no matter how good the confidentiality provisions • Sense of being extorted • Sense of vulnerability • Fear of being “wrong,” i.e., that personnel policy or practices & procedures not up to par • Management’s fears of being blamed • Sense of injustice • Often paternal or maternal attitude toward employees & feelings of ingratitude

17. The Employer Seeks Fairness as Much as the Employee • The way in which we respond to adversity "often reflects the fact that [our] prestige or status has been threatened more than the fact that [our] purchasing power has been diminished." Miller, Disrespect and the Experience of Injustice, Annual Review of Psychology (2002). • In other words, the corporate C.E.O., like any other kid on the block, will retaliate when he feels he has been disrespected. • Conversely, research shows that business people are reluctant to recommend legal • action if they believe that they and their company have been treated respectfully. • Every commercial interaction, we are told, "represents a social exchange and every form of social behavior represents a resource." Id. • People's satisfaction with the outcome of a commercial transaction therefore "depends highly, and often primarily, on their perception of the fairness of those outcomes." Id.