Recently, I conducted a mediation that never really got started. Why? Because coming into the mediation, plaintiffs and their counsel did not understand the status of their case, or exactly where matters stood procedurally. Thus, while plaintiffs believed they could bargain from a position of strength, on a “take it or leave it“ basis, defense counsel were telling me otherwise.
The matter involved the wage and hour laws of California. Plaintiffs, who had been parking valets, for the defendant employer, alleged that they had not been paid overtime, were not allowed to take meals and rest breaks and were not being given the tips proffered by customers, but that the employer was keeping this money.
To obtain all of these monies allegedly owed, plaintiffs filed their complaint with the Labor Commissioner of the State of California. That entity entered an award in favor of one plaintiff but against the other plaintiff.
The defendant employer – believing that the hearing officer in the Labor Commissioner’s office misunderstood or misconstrued the evidence – appealed the adverse decision in favor of the one plaintiff who received an award. By statute, this appeal is heard by a superior court judge de novo, i.e. anew. That is, the superior court is not merely deciding whether the Labor Commissioner erred, but rather, is hearing the case as though it had never been heard or tried before the Labor Commissioner. The Superior Court makes its own determinations independent of what the Labor Commissioner determined.
At the same time, plaintiffs filed a separate civil action in Superior Court for these same claims – overtime, meal and rest breaks and tips. In light of the pending appeal, the defendant employer filed a motion to dismiss which, for the most part, the trial court granted.
At this point, plaintiffs discussed filing an amended complaint but did not file a motion with the court seeking permission to do so.
At the last hearing before the Court – which is now hearing both the civil action and also the appeal from the Labor Commissioner – the Court set both the hearing date in July for the appeal and a trial date in 2012 in the civil action. The Court also set a briefing schedule for the appeal.
At the mediation, it soon became apparent that plaintiffs’ counsel was under the impression that the hearing date in July was for something other than the de novo appeal of the Labor Commissioner’s determinations. As told to me by defense counsel, what plaintiffs’ counsel had submitted in compliance with the briefing schedule did not discuss the Labor Commissioner’s order but something else.
Further, both counsel and plaintiffs did not appreciate that since the appeal was de novo, they could not assume they were entitled to all sums found by the Labor Commissioner to be due. That is, they could not insist – on a “take it or leave it” basis – that they be paid the Labor Commissioner’s award or else the mediation was over!
In truth, according to defense counsel, Plaintiffs would not be negotiating from a position of strength; leverage was not on Plaintiffs’ side.
All of the above came to light in the first few moments of the mediation. Needless to say, the mediation ended abruptly; plaintiffs’ counsel terminated the mediation upon realizing that she had a lot of work to do to try to oppose the appeal at this late date. Not surprisingly, neither plaintiffs nor their counsel were able to change their mindset about their case on such little notice. They needed time to go back to regroup and to process the information they learned at the mediation.
So, the morale of the tale is simple: understand your own case – both its facts and where it is in the procedural quagmire – before walking into mediation. Otherwise, you may find yourself negotiating from a false sense of strength, attempting to invoke leverage that you do not have. Obviously, this will not lead to a resolution.
. . .Just something to think about!