Wal-Mart Wins Battle: But War Continues

The United States Supreme Court issued an important ruling yesterday that will affect employment lawsuits across the country – and will greatly impact settlement discussions.  The Court ruled that a large group of women (estimated between 500,000 and 1.5 million – see my blog “What is With the Walmart Class Action?”) could not bring a “class action” against Wal-Mart.  The Wall Street Journal and the New York Times reported that the decision is a victory for business but criticized by labor and consumer groups.   However, all seem to believe the decision is momentous.  So, what does it mean?

Generally, lawsuits are brought by individual persons.  Class actions are exceptions.  A class representative must be part of the class and suffer the same injury to justify allowing a class action.  The district court had permitted the class to be certified on the basis that the claims shared enough “commonality” to raise the question of whether Wal-Mart’s had a single set of corporate policies that may have unlawfully discriminated against female employees.

Yesterday the United States Supreme Court in a 5-4 decision reversed the district court, ruling that questions of law or fact were not common to the class.   According to Justice Scalia’s opinion for the majority, “Here respondents wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer to the crucial question why was I disfavored.”

The dissent disagreed, stating that the district court’s finding of commonality should not be reversed absent an error or law or an abuse of discretion.  In other words, the trial court’s finding should be affirmed unless there is something really wrong with it.  The district court’s findings provided that women fill 70% of the retail positions and only 33% of management positions, women are paid less than men in almost every region, the salary gap widens over time, the systems for promoting employees were sufficiently similar to raise issues common to all class members, and Wal-Mart’s gender bias permeated the corporate culture.

So, is that the end of it?  Hardly.  Businesses think the decision will curb unmeritorious class actions.  Plaintiffs’ attorneys think it will deter legitimate claims because individuals will have difficulty obtaining counsel to fight large corporations.  The attorneys for the plaintiffs said they will regroup, initiate individual claims, and determine how to bring class actions perhaps by regions.  Let’s hope they all think about settlement too.

Posted in Class Action, Settlement, United States Supreme Court, Walmart | Tagged , , , | Leave a comment

Millenials: Ignore Adults and Lose Your Self in Something

Millenials:  Ignore what adults are saying about you.  It is unhelpful.  Go out and be individuals and lose yourself in something.  I like that message from David Brooks in his recent column, “It’s Not About You.”   I can identify with it.  I often lose myself in mediation.  But his message needs to be enlarged.  We simply need to avoid classifying people.  We spend far too much time stereotyping people.  These classifications get in our way.  We make incorrect assumptions, and it undermines our ability to be effective with others.

In case you don’t know, millenials are defined as people born between 1980 and 2000.  According to the stereotype, they have been managed throughout their youth with scheduled activities and little free time, and they are focused on themselves.  They are used to being in groups and succeed in that setting.  They are accustomed to getting every trophy and succeeding at everything.  Articles instruct us to capitalize on millenials networking abilities and their knack for multi-tasking.  Give them a good work/life balance.  According to Brooks, we compound the problem when we say things such as: “Follow your passion, chart your own course, march to the beat of your own drummer, follow your dreams and find yourself.”  He explains that we are, once again, focusing these kids on themselves.

The problem for me is this:  Can we just stop using these labels?  I guess I just don’t see the value of the labels.  First, I don’t see these traits, by and large, in my adult children, in my nieces and nephews and in my friends’ children.  So, where are these millenials?  Second, I don’t believe a negative frame or blaming the way these children were raised is helpful. Third, as a neutral, I have to fight these stereotypes in myself and in others.

What is helpful, Brooks explains, is to encourage these young people to begin to do tasks and to understand these tasks will begin to shape their lives.  We find things that interest us.  We find things we are good at.  If we are lucky, we find something we are passionate about, follow it, and earn a living.  The tasks of life are at the center. Even our negative experiences shape us.  How we work on those tasks shapes us.

And so, I am with Brooks.  Go lose yourself in something.  And, try to leave the stereotypes behind.

Posted in mediation | Tagged , , , | Leave a comment

Who Should Suggest Mediation?

I have often been asked whether an attorney shows weakness if the attorney suggests mediation.  In 1998, when I began mediating, this was a frequent concern.  Fortunately, at that time, I was the Chief Appellate Mediator at the Utah Court of Appeals, and attorneys were permitted to call my office and confidentially request mediation. The court randomly selected briefed cases for mediation at that time, and neither party was advised if the mediation was requested.  Counsel did not want the other side to know they suggested mediation because they were concerned it would show weakness.

Over the past 13 years, things have changed. Judges often order parties to mediate within a certain time frame.  At times, the order is too early in the case.  At other times, the litigation has dragged for many years, and the parties are not only entrenched but concerned that they have too much invested in the case to settle.  However, attorneys now know that the court may order mediation at any time, and they know that most cases are mediated at some point.  Thus, they often agree to mediate before the judge orders mediation.  In most cases, attorneys wait until they have taken key depositions and have the critical documents needed.  At other times, attorneys decide to mediate when they have only a rudimentary understanding of the case.  In such instances, counsel are mediating early to save the client’s resources for settlement rather than using the client’s resources on attorney’s fees.

Whether attorneys and clients opt to mediate early depends many factors including the facts of the case, the complexity of the dispute, the level of emotion, and the client’s desires.  In one recent instance, an attorney believed his company had significant exposure due to a death, and the case was highly emotionally charged.  He wanted to mediate early to based on his sense that it would better serve both his client and the family.  The high value case settled early.

Today, neither side seems to be as concerned about showing “weakness.” Rather both attorneys matter-of-factly discuss mediation as a logical appropriate step in serving the client’s best interests and saving attorney’s fees.  In the instances where this concern of showing weakness persists, attorneys can call the mediator, explain the dilemma, and engage the mediator to assist in convening the case in an appropriate manner, including having clients with settlement authority present, providing mediation briefs, and exchanging important documents sufficiently in advance of mediation.  In some states, mediators are hired early to assist attorneys manage the discovery process in large cases, including narrowing the necessary depositions and managing the document exchange.  Clients generally appreciate the cost-savings of mediation because they can be involved in formulating a solution, controlling the case, and can better control the outcome; whereas if the case goes to court, the judge will decide the matter.

Posted in law, mediation, Settlement, Uncategorized | Tagged , , , , , | Leave a comment

Stop, Look and Listen: Is an Apology Helpful?

Is an apology helpful in mediation?  The short answer is maybe.  Apologies can be helpful.  They can also be destructive.  The art of apology is helping a client and lawyer think through whether the apology will be productive.  Hearing the apology in advance is critically important.  Determining the timing of the apology is also key.  Understanding what they expect to be the result of the apology or the reaction to the apology is also important.

Nina Meierding spent 3 hours on May 7, 2011 explaining “The Art and Science of Apology” to the International Academy of Mediators.  We engaged in a rich dialogue of the differences between a full apology, partial apology, and partial and insincere apology. The full apology with no conditions can be powerful.  “I am sorry.  I made a mistake. It was my fault.”  However, the timing and sincerity are crucial.

We also learned about the impact of apologies on settlement and more derivations on types of apologies such as unilateral apology, rapport building apology, and ritual apology.  Often one party will seek a bilateral or two way apology.  They will apologize and become upset with the other person does not respond in kind.  We often see this dynamic in business and personal relationships.  Consider the business person who is in a mediation with a former business partner.  He may say, “I am so sorry we are in this difficult lawsuit.”  He may expect the other side to say, “So am I.”  When the other person does not respond as he expects, and instead says, “You filed the lawsuit,” the apology may damage the negotiation.

Nina helped us understand the types of apologies and why people may seek certain types of apologies.  She also addressed the following questions: 1.  Who should make the apology? 2.  Who should be present? 3.  Where should it happen? 4.  When should it happen? 5.  Why should it happen?  All of these questions are important to consider and carefully answer in consultation with lawyers and clients.

We learned that we should make no assumptions about apology.  We should not assume we understand the purpose of the apology or the intended result.  Likewise, we should not assume we know how the recipient will hear the apology.   Rather, if the issue is raised, we should explore the goal of the apology, the needs and the expectations of both parties.  At that point we can attempt to assist in negotiating a helpful apology.

Posted in Apology, law, Mediation Advocacy, Settlement | Tagged , , , , | Leave a comment

Reading Emotions: Fear and Lying

We interpret body language and emotions through our own lens.  What assumptions do we make?  Are the assumptions accurate?  I learned that many of the common American beliefs about body language are inaccurate.

What we do know is that people who are lying can look you in the face, particularly pathological or habitual liars, according to Clark Freshman, who trains lawyers and negotiators in the science of emotion recognition, and Paul Ekman, author of “Emotions Revealed: Recognizing Faces and Feelings to Improve Communication and Emotional Life.”  Looking away or looking up or down is also commonly thought to signal lying.  However, looking elsewhere usually indicates a person is thinking.

So, what are the signs that a person is lying?  How can we accurately recognize emotions from facial expressions and other body language?  The answer is multi-faceted.  First, carefully observe the person’s baseline or normal nonverbal communication.  For the casual observer, this may not be easy.  All assumptions can be correct or incorrect depending on the baseline.  So, the general warning is to question assumptions and try not to jump to conclusions.  Next, learn to recognize the soft spots and the sweet spots indicated by certain body language.  Then, respond to what you see, create a theory, investigate the theory and act to test the theory.  The more provocative you become (i.e., when one person becomes hostile or angry), the less information you will receive.  This is simply because the person may be responding to the provocative behavior rather than to the subject matter.

In addition, a person who blinks frequently is not necessarily lying.  Likewise, scratching a nose or head often means nothing; however covering a face (as athletes do while watching a teammate lose a race), can indicate fear, disappointment, disbelief or despair.  However, there are micro-expressions that can show positive or negative emotions.  These micro-expressions, such as slightly wincing or wrinkling the nose or mouth may indicate nervousness or dishonesty.  Likewise, they can indicate the opposite, depending on the context.  Emblems, such as a slightly lifted middle finger, may also be a subconscious negative message, but be aware that these emblems vary significantly across cultures.

So, how useful is this information to a mediator?  After watching videos and learning from Clark Freshman for 3 hours on Friday, 6, 2011 at the International Academy of Mediators conference in Napa Valley, I learned that only about 5% of the population accurately reads body language, but professionally trained and experienced mediators with thousands of cases under their belts are exceptionally accurate – not only at lie detection but at accurately perceiving a wide variety of emotions – contempt, disgust, nervousness, happiness, surprise, sadness, anger and fear.  Although mediators do not necessarily assess truthfulness, learning to read body language is extraordinarily helpful in moving negotiations through a process that is useful to lawyers and clients and results in a successful settlement.

Posted in Body Language, Difficult People, Emotion Recognition, Emotions, Lying, mediation, Mediation Advocacy | Tagged , , , , | Leave a comment

A New Tool for Working With Difficult People

High emotion is a standard part of mediation.  Clients and lawyers both can be emotional.  Working with these emotions effectively can save time in mediation, money over the long haul for the parties, and aggravation for clients and their families and friends.

We all know difficult people.  We know the causes are habit, culture, high emotion, inappropriate strategies, illnesses and decision traps.  We have all the standard responses to working with these problems – true listening, pre-mediation meetings, empathy, taking a break, referral to counseling, breaking down the issues, and the presence of a trusted friend, etc.

So, what about providing counsel with a written worksheet with a risk analysis of the hidden and often unstated risks and goals?  Risks and goals that illuminate and quantify some of the difficult-to-value aspects of settlement such as publicity, gossip, religious concerns, health impact, alienation of others, lost time from work, etc. And, add to that financial impact of each of these factors.  John Wade of Bond University in Queensland, Australia provided us with a fascinating new tool to use in highly emotional cases.  With 60 or so top mediators from places as diverse as Hong Kong, Vancouver, and New York, all mediators had a different idea of how they may use this tool in their practice.  Thanks John for an enriching afternoon.

Posted in Difficult People, Emotions, mediation, Settlement | Tagged , , , , , | Leave a comment

Negotiating with Difficult People, Lying and Apology

I am lucky.  Every 6 months for the last 10 years, I have been fortunate enough to attend excellent seminars for commercial mediators on really interesting topics.  Next week the International Academy of Mediators will meet in Napa Valley, California (yes, there will be wine tasting) to learn new techniques for moving difficult people to settlement (always helpful to have more tools), how to detect lying and make deals in spite of lying (you mean people lie in mediation?), and the timing, delivery and sincerity of apology (how to making apologies genuine and useful).   Sounds like useful information for anyone.

John Wade, of Bond University in Queensland, Australia will be teaching “Negotiations with Difficult People and Improving Your Persuasive Power.”  He will be providing us with 3 sets of new tools for moving parties toward settlement. First, he will provide a new form of analysis that goes beyond the traditional analysis of “What do you think the court is likely to do in your case?”  Lawyers have praised John’s approach as a valuable tool for helping clients address personal and business objectives at mediation. The second set of tools addresses categories of “difficult people,” and provides techniques to convert them from obstacles to advocates for settlement, including scripts for engaging them in pre-mediation sessions. The third set of tools draws upon current research on “persuasion” in marketing and psychology to identify practical tips specifically for mediators in the trenches.  I met John Wade in San Francisco one year ago and found him delightful.  He was contemplating a move to Vancouver, British Columbia to be closer to his grown children.

Professor Clark Freshman of Hasting University in San Francisco regularly trains lawyers in lie detection and emotional skills.  He will be teaching a session entitled, “Dodging Lies and Making Deals: Emotional Awareness for Negotiation, Compassion, and Lie Detection.”  He will examine what we already think we “know” about lies and contrast that with what science suggests.  He will also introduce some examples of universal emotions, including recognizing the universal facial expressions for contempt and for distinguishing different types of smiles. Finally, he will review several video examples of lying and discuss how to respond when we see such emotions or signals, including when emotions may indicate lying and when they may arise for other reasons.

Nina Meierding, a well-known mediator and trainer, will teach “Why Can’t They Just Say They’re Sorry: The Art and Science of the Apology.”  She will explore the many types of apologies (including rapport, transactional, full and partial) as well as the effect of timing, delivery, emotionality and sincerity. She will focus on how different cultures view fairness, truth and forgiveness and the impact of these beliefs on both giving and receiving apologies. With a more complete understanding of the intricacies of an apology she will teach us how to help our clients move beyond numbers and seek a greater level of resolution and closure by giving and receiving apologies in a way that is both strategic and sincere.

The presentations at the IAM conferences are second to none.  However, socializing with other mediators, comparing mediation stories, and sharing negotiating strategies enriches the professional experience.  I learn more from colleagues at dinner than can be imagined.  I always come home from these conferences with new ideas and renewed energy.

Posted in Apology, Difficult People, Emotions, law, Lying, mediation, Settlement, Uncategorized | Tagged , , , , , | Leave a comment

Utah’s Own Hot Coffee: McDonald’s Hot Coffee Case in Closing Argument Warrants Reversal

The Utah Supreme Court held that referring to the McDonald’s Hot Coffee case in closing arguments warrants reversal.

I just recently wrote about the McDonald’s Hot Coffee case and a Sundance movie “Hot Coffee”.  The movie documents the incorrect public perception of the McDonald’s Hot Coffee case, actually entitled Liebeck v. McDonald’s Rests., P.T.S., Inc, No. CV-93-02419, 1995 WL 360309 (N.M. Dist. Ct. Aug. 18, 1994).

Well today, the Utah Supreme Court held that a jury verdict warranted reversal due to counsel’s reference to the highly inflammatory McDonald’s Hot Coffee case in closing arguments.  The Utah Supreme Court recognized, in Boyle v. Christensen (No. 20090822, April 15, 2011), that “the case has come to symbolize greedy plaintiffs and lawyers who file frivolous lawsuits and win hugely excessive sums in a broken legal system.”  Plaintiffs lawyers throughout the country will likely be pleased that a court has formally recognized that: 1) the McDonald’s Hot Coffee case is misunderstood and inflammatory; and 2) mentioning the case in closing arguments is reversible error.

Posted in law, mediation, Settlement | Tagged , , , , , | Leave a comment

Facebook’s Mediated Settlement: Is the Deal Done?

Facebook’s mediated settlement with ConnectU and the Winklevoss twins might finally be over in light of the Ninth Circuit Court of Appeals’ opinion issued April 11, 2011.  Well, . . . it may be over.  There may be an appeal.  But, what can we learn from the opinion?

Cameron Winklevoss, Tyler Winklevoss (twins and Olympic crew-rowers) and Divya Narendra (“the Winklevosses”) sued Facebook claiming Mark Zuckerberg stole the idea for Facebook from them.  Facebook struck back with a suit claiming Winklevosses, for the benefit of  their competing social networking site, ConnectU, hacked into their site and tried to steal users.  (Yes, this is the story turned into a movie, “The Social Network.”)  The California court ordered the parties to mediate.

In mediation, the parties signed an “agreement to mediate” with a provision that all statements made during mediation were privileged, non-discoverable and inadmissible “in any arbitral, judicial, or other proceeding.”  That provision eventually preserved the mediation process as privileged and inadmissible in court.  That’s important.  Mediators, attorneys and clients rely on the confidentiality and privilege of mediation to allow people to talk openly and to get deals done.

But what happened in mediation? And who tried to get out of the deal?  According to the New York Times and the Wall Street Journal, the 2008 settlement is worth between $150 million and $200 million today. As the Ninth Circuit stated, “For whatever reason, they now want to back out.”  One blog’s headline states, “They’re Handsome, They’re Rich, and They Didn’t Invent Facebook.”

In the mediation the parties settled the case using a handwritten document.  According to the court, the Winklevosses agreed to “give up ConnectU for some cash and a piece of Facebook,” according to the Ninth Circuit.  The deal fell apart as the parties tried to put the multiple final documents together. (This is why I always urge attorneys to bring final pre-drafted agreements if possible to mediation, and we work on the provisions until finalized.  If we need time, we may have follow-up mediation sessions to hammer out the documents necessary to effectuate the agreement.  In one case, I had the attorneys exchange draft agreements in advance.  I have no idea what they did in this case.)

The Winklevosses first argued that the 130 pages of post mediation documents Facebook tried to get the Winklevosses to sign rendered the original agreement indefinite and unenforceable.   The court said the initial contract provisions were sufficiently definite and rejected that claim.

The Winklevosses then claimed Facebook violated Rule 10b-5, and sought rescission of the Settlement Agreement under Section 29(b) of the Securities Exchange Act of 1934.  They said Facebook misled them into believing their shares were worth 4 times as much as they turned out to be.  The court was not persuaded.  Both sides were equally sophisticated, had half a dozen lawyers, an opportunity to figure this out, accountants, experts, and the ability to make the agreement contingent on the accuracy of this price per share.

Interestingly, to make this claim about the price per share, the Winklevosses tried to introduce evidence of conversations during mediation.  The court made a distinction between  hiring a private mediator and a court-appointed mediator in determining whether the conversations were protected.  Because the mediator was not stipulated to by the parties and approved by the judge under California rules, the court declined to exclude the conversations under California’s local court rules.  The agreement to mediate, however, did provide that the conversations were excluded thereby allowing the court to rule that the evidence inadmissible.  I guess that means one of two things for anyone mediating in California:  1) Get a stipulation and court approval before you privately mediate so you have the protection of the court rules; or 2) Use an agreement to mediate that covers your bases.

Good lessons from this opinion.  But is it really over?  Chief Judge Kozinski, writing for the court sounds like he thinks the case is or should be over.  Midway through the opinion, he states, “There are also very important policies that favor giving effect to agreements that put an end to the expensive and disruptive process of litigation.” And, he closed the opinion stating,“At some point, litigation must come to an end.  That point has now been reached.”

According to the Wall Street Journal, Winklevosses attorneys say the case raises significant federal issues, and they will file a Petition for Rehearing En Banc –  to have the entire Ninth Circuit Court review the decision.  Stay tuned.

Posted in Confidentiality, law, mediation, Privilege, Settlement | Tagged , , , , , , | Leave a comment

What’s with the Walmart Class Action?

The Walmart class action is making people angry.  So, what’s the deal?

Is the highest court in the land going to rule for big business and leave the little guys unable to bring a class action against a large employer?   Or, is the case too enormous to be tried, and just a bad idea because it will hurt businesses and the economy?  Well, this is what you hear – but there is more to the debate, much like the McDonald’s hot coffee story.

Originally 6 women filed an action in San Francisco against Walmart claiming Walmart discriminated against them based on their gender.  The women claimed they are paid less than men despite higher performance ratings and performance evaluations, and women receive fewer promotions and wait longer for promotions than men.  The federal district court in San Francisco certified the class – meaning the claims can be tried together. Walmart appealed.  The Ninth Circuit Court of Appeals agreed that the class could be certified, but they wrestled over the test for a class action.

The Walmart case supposedly involves as many as 1.5 million women.  True or False? Actually, we don’t know.  But, under the Ninth Circuit’s ruling, women who no longer work at Walmart cannot be part of the class, eliminating 2/3rds of the women according to the Ninth Circuit – so the class sounds like it could be down to 500,000 women.  But, who knows?  The United States Supreme Court has not ruled.  Fact of the matter is we don’t know how many would be in the class.  So, calling the class 1.5 million women is questionable, at best.  Overuse of the 1.5 million number inflames both sides.  Problem is – no one knows the size of the class at this point.

But that is not all.  The big issue in the case is whether the women in the class have enough in common to allow the case to go forward as a class action.  Plaintiffs submitted 120 affidavits of women describing anecdotal evidence of gender bias.  But, the plaintiffs had to show a central Walmart policy of gender discrimination.  To show a central policy, plaintiffs used an expert report by Dr. Bielby, an academic specializing in “social framework analysis”.  Dr. Bielby’s expert report stated that he had collected “scientific evidence about gender bias, stereotypes and the structure and dynamics of gender inequality in organizations” and concluded that Wal-Mart’s centralized personnel policy and its policy allowing subjective decisions by managers in the field may be responsible for the pay disparity.  Together, he said, those factors allowed stereotypes to infect personnel choices, making “decisions about compensation and promotion vulnerable to gender bias.”  One important question before the United States Supreme Court is whether this expert report was properly considered.

So, now it makes sense.  According to the New York Times, the plaintiffs’ theory is that centralized policy gave local managers too much discretion in pay and promotion decisions, opening the company up to criticism.  They are relying on Dr. Bielby’s report — and his methodology is hotly disputed.  WalMart says its policies bar discrimination and promote diversity, and its policies across the country do not have enough in common to warrant treatment as a class.

And, WalMart wants the cases tried individually, not as a class based on a sociology theory. The Wall Street Journal reports that based on the justices questions (that is the subject for another day), the Court is likely to rule for Walmart.  If they don’t, a ruling for the plaintiffs may open the door to unprecedented liability.

I have mediated an employment case that was certified as a class action and another huge case that was not certified as a class action.  I know how it impacts settlement.  So, I am interested.  Hmmm.  Sounds like they both have arguments.

Posted in Class Action, Employment Law, Gender Discrimination, law, Settlement, United States Supreme Court, Walmart | Tagged , , , , , , , | Leave a comment