Steven, a 63-year-old property manager, spent his entire career in sales and service of the booming (and sometimes busting) California Condominium market.  Last summer, he stepped out of line when he saw a colleague, 43 year-old Kristen vacationing in the Bahamas with her husband and two young children.  In front of his wife, Janet, a real estate lawyer, he muttered to Kristen:  “Whoa.  I had no idea you rocked a bikini like that!”  Janet rolled her eyes, as she had seen this kind of ridiculous, flirtatious behavior so many times from Steven in the course of their 30-year marriage.  Kristen appeared slightly disgusted, but did not react at the time at all.

When she returned from summer vacation, Kristen reported her discomfort with Steven’s on-going personal remarks to the Company’s owner, Joseph, an absentee CEO who was a client of Janet’s firm and an old friend of both Steven and Janet.  Joseph called Steven that day and simply advised him that Kristen had made the complaint and advised him to submit his resignation.  Stunned and embarrassed, Steven agreed and resigned immediately.  He never got a chance to tell Joseph or the Board that he meant nothing by the remark, that he was merely trying to appear youthful, and that for the past two years on the job, all of the women at the site had referred to him as “the old guy”, even buying a T-shirt for his birthday which said boldly:  “Old Guys Rule”.

Though Steven suffered grave economic damages, in a tough economy with no notice or warning that he would be looking for a job at age 63, he was initially unable to find a lawyer who would handle a case of wrongful termination in age discrimination based upon the fact that he voluntarily resigned in response to a complaint of sexual harassment.  Ultimately, a young former associate from Janet’s firm, Alex, agreed to file a complaint and litigate through mediation, though everyone knew he was not ready to try the case should it proceed to an evidentiary hearing.  He accepted the case on a contingency fee.

The employment agreement by the Condo Association included an ADR clause, so when Alex wrote the initial demand letter, the response, which came from a large, well-known employment defense firm, made clear that the matter was subject to an ADR provision which required pre-filing mediation and, failing that, binding arbitration.  Joseph was fine with that idea, because he did not want to risk facing two lawsuits:  one by Steven and the other by either Kristen or several of the female employees who had since come forward to complain about how “the old guy” harassed them mercilessly by commenting almost daily about their attire:  whether their heels were too high or their skirts too short, Steven was the first to notice.  Joseph’s attorney feared that the company was at risk for other sexual harassment complaints, given that Joseph knew Steven socially, and may have also observed or been on notice of his general proclivity towards flirtatiousness as well as his job history, which included other complaints of sexual harassment, though none had risen to the level of a lawsuit. 

Pre-Mediation:

The mediation brief from the Company made it clear that the evidence would show that this termination was not wrongful and certainly not based upon discrimination against Steven for his age, despite the fact that there were no other employees older than 45 at the site.  (In fact, he was also the only man on site, though he was not claiming that was the source of the discrimination.)  The evidence would also show an unequivocal justification for letting Steven go:  the Company had received complaints that he was sexually harassing his co-workers and simply could not tolerate his continued misconduct.  The law in California was that all employment is at-will and the employer simply chose to terminate Steven’s employment.  The defenses were completely aligned with justice.

The Plaintiff’s brief, on the other hand, spoke to the pathos and pain of aging in the workplace.  Once an athlete and always a flirt, Steven now saw that the women in their 40’s somehow got sales and service done with more ease than he could.  Whether a homeowner or a vendor, people seemed naturally attracted to these women in ways that made Steven feel left out and less than successful.  The women constantly teased him—but in a way he saw as playful and amusing.  His brief spoke of fairness:  it was simply unfair that the younger women were permitted to tease him about his grey hair and forgetfulness and he was not permitted to complement a co-worker on her appearance when the two found themselves vacationing with their families at the same resort. 

The Mediated Solution:

In the typical employment case, which often pits justice against fairness, balancing the two goals can only be accomplished in mediation.  In trial, particularly in arbitration, the arbitrator is not permitted to make decisions based solely upon principles of fairness or equity. Whether or not it seems fair, an arbitrator is required to follow the law and carry out justice. 

Yet employment is a relationship, and sometimes the strict rules of justice do not quite meet the goals of fairness that both sides may hold.  In Steven’s case, the CEO felt terrible letting Steven go, but acted out of fear that Kristen would sue the Company for sexual harassment if swift and punitive action was not taken to correct what appeared to be a series of comments which had adversely affected a number of the younger women in the workplace.  Essentially, in the Company’s lawyer’s analysis, Steven had managed to singlehandedly create a sexually hostile work environment by his daily comments about the younger co-worker’s attractive attire. Unfair as it may have appeared to Steven, the law required Joseph to protect those women and safeguard the workplace by calling for Steven’s resignation.

The mediation began with an analysis of the legal contentions and defenses, but ultimately led to a joint session in which Janet and Steven, acting for the first time in many years as a true team, had the opportunity to confront Joseph and inform him how this abrupt dismissal had adversely affected their family.  The termination had occurred during their younger daughter’s last year of High School.  Since both Janet and Steven were struggling to come to terms with their own future as empty nesters, it called into question their “next Chapter” and caused a very personal examination of whether Steven’s lifetime of flirtatiousness with Janet’s friends, family members, and co-workers was, as she had always suspected, innocuous, or whether he was actually an evil “sexual harasser” who would forever hold that stigma to their large circle of professional friends and relatives, as well as their own adult daughters. 

Much more than the employment relationship was on the line.  Steven and Janet’s marriage had been struggling for many years and its survival was at stake.  So was Steven’s self-esteem and reputation.  In response, the mediator conducted numerous micro-mediations, framing and re-framing the defenses raised by the Company and the damages claimed by the Plaintiffs with diplomacy and sensitivity.

The benefit of a mediated solution for Steven was obvious:  he could avoid the public humiliation of a trial as well as all risk that a career’s worth of mis-steps would be dragged out for his wife, Janet, to hear, likely ruining an otherwise long and content marriage.  The benefit for the Company was that they would be able to keep the settlement confidential and still appropriately protect the women employees from any potential future exposure to sexual harassment.  Too, an early mediation would save tens of thousands of dollars in defense fees while the Company could still send a clear message to Steven and all other employees that this type of behavior, while it may have seemed harmless to Steven, was simply not tolerable in the modern workplace.

The Unexpected Benefit: 

After the joint session, the negotiation began.  The opening demand by Alex contemplated two years of lost salary, significant damages for emotional distress for both Steven and Janet, and statutory attorneys fees based upon the claim of discrimination (contemplated at a reasonably low rate, but for the entire action through trial).  Not surprisingly, the defense offered only “nuisance value” in response.

After several hours, the case was settled on terms that both parties could tolerate.  The Company paid substantially less than it would cost to litigate the matter, even if they won.  Steven took away enough to start a new business leasing residential real estate under his own umbrella.  Alex got his feet wet in his first mediation, and Janet and Joseph were able to maintain a friendly, respectful client/attorney relationship.  The mediator was exhausted but gratified as she observed Janet gently take Steven’s hand as they left the mediation office.

Unique Reasons for Mediation in the Employment Arena:

There is now a great collision in the workplace of men and women, employees and managers representing multiple cultures and ethnicities, and a broad age range, which may span from age 18 to over 80.   A generation ago, most workforces were much more homogenous.  Steven’s father retired at age 60.  He never contemplated working into his 60’s, except that he also had failed to save up enough money to comfortably retire, especially after putting two daughters through private school and now college. 

His eldest daughter had already entered the work place and many of the young women who Steven managed reminded him more of his daughter’s friends and contemporaries than of Janet’s.  Janet, now 57, was the senior woman at her real estate firm; all of the other’s long since retired to other lines of less stressful work or charitable projects.  It was not her expectation that she would still be working either, except for the fact that she now had significant earnings and Steven’s career had been so spotty that she felt she might never retire.

At the same time, the rules of acceptable behavior and practice have changed dramatically during Steven’s almost 40-year career.  When he started, flirtation and even dirty jokes were commonplace in the workplace and seemingly went unnoticed.  At the least, it was unheard of to bring a lawsuit against your employer for what would now be considered “bad taste” in the workplace:  a hug, a pat on the shoulder, a furtive glance at an attractive woman’s chest or rear, were all considered commonplace, albeit not necessarily welcome in the workplace.

Mediation is the perfect forum for debating, evaluating, and resolving these types of sensitive issues.  It offers confidentiality.  The outcome sets no legal precedent for the future.  The parties are not constrained by strict legal rules.  There is no requirement that the evidence be fully developed or established by the time of mediation.   Expensive and extensive discovery is unnecessary.  Eloquent and well-researched trial briefs and jury instructions are not “at issue”.  And mediation, in the hands of the right mediator, is conducted with humanity and a view towards a better future, not a different past.  That is, in the end, perhaps the best way to describe the difference between fairness and justice, too.

By Jan Frankel Schau

Jan Frankel Schau. Problem Solver. Mediator. Author. Ally. Jan Frankel Schau, Esq. settles litigated cases arising out of employment, business and tort disputes and has mediated over 1,000 litigated cases throughout Southern California. Jan has been a Panel Neutral at ADR Services in Los Angeles since 2007 and is widely considered one of L.A.’s preeminent mediators. Jan is also a popular trainer, author and lecturer on topical issues related to Alternative Dispute Resolution, including her book, “View from the Middle of the Road: A Mediator’s Perspective on Life, Conflict and Human Interaction. Please visit: www.schaumediation.com