An old friend (I’ll call him Frank) called to tell me he was being sued by a former employer (I’ll call him Owen) for improperly taking customers and trade secrets. Frank and his new company (“New Company”) were lawyered up against Owen and had a mediation scheduled with a retired judge. I warned Frank that mediations conducted by retired judges often feel silly, meaningless and frustrating to litigants, and that they achieve, best case scenario, a settlement that both sides are unhappy with. I contrasted that experience with the sort of mediation I provide, where meaningful conversation occurs, misunderstandings are cleared up, and any settlement reached is based on increased understanding of the situation and each other’s perspective. We agreed that we should figure out how I could help this mediation go that direction.
My approach is based on the idea that people in conflict are seeking to make empowerment and recognition shifts. That is, they want to avoid being victimized, and when they gain confidence that they aren’t being victimized, they tend to stop victimizing each other.
Frank and his team decided I could appear as counsel to an additional party (Adam), one who had also worked for Owen, had started to work for the new company, and, like Frank, had never been paid what he was owed by Owen. Adam was not yet a party to the lawsuit, but our team felt it would be helpful for Owen to be aware of cross-claims that would be made against him, if a deal were not made at the mediation. In preparation for the mediation, I sent the following email to our team (Frank, his lawyer, two guys from New Company, New Company’s lawyer, and Adam):
I’m looking forward to seeing/meeting you all next week. Here are some thoughts, which I’m hoping will be helpful in preparing us for the mediation. These thoughts are nowhere near exhaustive. As I see it, the greatest potential of a meeting such as the one we’re having is that things could occur that we could not have predicted – new insights, new clarity, new ideas. So please don’t let my thoughts limit your creativity.
Here are my guesses of things that could happen that would be helpful:
- Owen could have the chance to thoroughly express his perspective, including his descriptions of how Frank, New Company, and Adam have done wrong. Ideally he could express these things in a way that makes it clear to him that everyone on our side has heard, understood and taken seriously his perspective. In general, it works best if he’s not challenged as he speaks, and if the only questions asked are for the purpose of clarifying what he means, so as to let him know that he’s not being doubted but that we are genuinely trying to understand him. If he insists on having his lawyer(s) speak for him, that’s not ideal, but we should act consistently with our desire to thoroughly understand him and them. The benefits of Owen and/or his lawyers having this opportunity include:
- relieving Owen of some of his need to “teach us a lesson”, “show us that he means business” or “be taken seriously”. Let’s let him teach us; let’s be impressed by how much he means business; and let’s take him seriously.
- giving us insight into what’s motivating him. This insight can help us
- think of responses that might help him see his way to accepting more of our terms
- give us information that will be helpful if the fight continues
- Frank, Adam, and others of us who have direct knowledge of the facts could clear up Owen’s misconceptions (after Owen has had the chance to be fully understood).
- Things that he’s just plain factually wrong about can be disputed.
- Areas where he’s making false assumptions can be corrected.
- Questions he has about facts we know can be answered.
- And points that he’s making that are true and that seem important to him can be acknowledged.
- We can ask Owen questions that we want answers to:
- What were the income and sales numbers that weren’t disclosed to both Frank and Adam that we believe should have affected their commissions and ownership?
- How does he justify withholding that information if he continues to do so?
- What’ are his real practical concerns:
- Is he hoping to derail Frank’s work with New Company?
- Is he afraid he’ll lose all of his customers?
- Is there a way we can reassure him that it’s not as bad as he thinks? Or do we need him to understand that he’s screwed no matter what? Or is there some hybrid version we can help him come to grips with?
- Just as Owen should have a chance to be thoroughly understood, so should we. It will be helpful for Owen to know just how certain we are that no trade secrets have been stolen, that no other violation of his rights has occurred, that he’s legally obligated to pay significant amounts to Frank and Adam and that he’s obligated to pay everyone’s attorney fees (assuming we continue to feel clear about all of these issues). It will also be helpful for him to know just how motivated and capable of continuing to fight we are. It will also be helpful for him to know any ways in which we are willing to work with him on a settlement and/or help minimize the damage that’s been done to his business. And it’s important for us to get anything off our chest that might be clouding our judgment on how we proceed.
- The lawyers should have a chance to discuss and debate the legal merits of the claims and counterclaims. If there are legal angles that Owen’s side has thought of that we haven’t considered, we should hear those. If Owen’s lawyers misunderstand the weakness of his claims and the strength of our counterclaims, they should have the chance to be brought up to speed by our lawyers. To the extent there are areas of uncertainty, Owen and we should have the chance to evaluate that, based on what we hear from the lawyers whose job it would be to continue the fight.
LIKELY GIST OF THE MEDIATION, IF WE DEFER TOO MUCH TO THE MEDIATOR’S IDEA OF THE PROCESS: The judge/mediator bases his credibility on his long career as a litigator and then judge. As it says in his JAMS profile, “he is attuned to the vicissitudes of litigation.” In other words, he knows, as we already do, that litigation is expensive, time-consuming, and unpredictable. If we leave it to him, he’ll spend the day going back and forth between rooms, warning each side that they might lose, and that even if they “win” they might not get paid, and any winnings might not cover the costs of litigation. And he’ll say “a good settlement is one that both sides are unhappy with.” And he’ll attempt to nudge both sides closer together from wherever they start negotiating. To the extent we imagine that he can give us insight into any weaknesses of our side of the case, I suggest we instead rely on our lawyers for that. Neither they nor the mediator can predict anything, but we get it: expensive, time-consuming and unpredictable. The other hope we might have is that the mediator can persuade Owen to back down. But I’m guessing Owen and his lawyer also know what this mediator’s agenda is, and are hoping he’ll have a greater impact on us. This method of mediation is popular with lawyers, because it allows them to rely on the mediator to be the bearer of the bad news, but again, I trust our lawyers to be completely forthright about any legal bad news that we all need to hear. So I don’t think we should waste time pleading our case to the mediator.”
Despite my efforts to improve the quality of the mediation, my predictions in that final paragraph of my letter came true.
Read Part 2 here