Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

I often compare employment law cases to bitter divorces.  Both require the deft touch of a mediator in order to get them resolved.

Fortunately, for our blog readers, we have another terrific guest blogger, Victoria Pynchon to talk about mediation.  She blogs, but more importantly, she is a mediator and arbitrator for the Southern California ADR firm Judicate West.

For readers looking for more sage wisdom, there are a number of places on the web to find Victoria's writings. She blogs at the Settle It Now Negotiation Blog and IP ADR Blog.  She is also a columnist with fellow mediators Diane Levin, Stephanie West Allen and Gini Nelson for The Complete Lawyer. 

If you haven't checked out Victoria's work, you're missing out on some tremendous helpful insights into settlement and negotiation.  I thank Victoria for submitting this and look for Part II of this column soon.

I was having a casual conversation about relationships over afternoon lattes recently when a young friend of mine offered his surprising view of martial life. 

“Marriage,” he said, “is mostly about sharing chores.”

Because I’m married to this young man’s father, my response was a little despondent.  “Then I’ll never catch up,” I said, “because your dad will always do more chores than I do.” 

“He may do most of the chores around the house,” countered my wise and witty step-son, “but you do most of the emotional chores.”

Aside from cheering me up, my step-son’s comment demonstrated his inclination to problem solve in a  principled and integrative manner.  Because we are all more or less continually bargaining with family members over the division of household tasks, it occurred to me to use chores to describe the differences among positional, principled, distributive and integrative negotiation techniques.

If you are a litigator, position-based bargaining is in the marrow of your bones.  At its simplest, positional bargaining requires the negotiator to convince his opponent that he is right about “facts” that entitle him to a remedy.    

If we negotiated chores from a “rights and remedies” point of view, a conversation about making the bed in the morning between husband and wife might go like this.

Me:        I’m the only one who ever makes the bed in the morning.  You should at least do it when I leave the house before you get up.    

Him:      Why bother?  We’re just going to mess it up again.

Me:        You could say the same thing about the dishes.

Him:      No, dishes are different.  You have to wash them before you use them again.  We don’t need to make the bed before we sleep in it again.

I could write pages about this argument but will save you my martial distress by cutting to the chase – this argument cannot be won because positional bargaining requires that one party be “right” or “almost right” and the other party be “wrong” or “probably wrong.”  The way this problem is framed – the task doesn’t need to be done at all. It resists “positional” resolution because it is a matter of preferences rather than rights.      

When a chore must be done, it lends itself more readily to resolution through principles of equity or fairness.         

Me:        I’ve stayed home waiting for workers to fix things around the house every day this week.  It’s not fair that I’m always the one staying at home to wait for them.      

Him:      But you work at home.  It doesn’t make any sense for me to leave work and come home to wait for the workers.   It’s more cost- and time-efficient for you to do so. 

The resolution to my complaint (which is really about something else – but more about that later) is “principled” because there are rational metrics to apply to the problem.  The chore-choice is resolved by a time and effort metric --  who will be the least inconvenienced by the required task.  Note how the principled approach almost invariably includes justice (fairness) metrics, i.e., it’s fair that I stay home because I’m already here; don’t need to expend time traveling to meet the workers; and, can likely continue to get my work done while supervising them. 

When mediators and negotiation gurus talk about “win-win” and interest-based or integrative solutions, they’re talking about dividing resources according to the needs, desires, and preferences of the parties.  When they use terms like win-lose and  distributive bargaining, they’re talking about seeing all tasks as fixed and capable of “distribution” solely by way of numeric percentages.

The entire “chore package” lends itself both to distributive and to integrative bargaining.  The amount of time it takes to do household tasks, for instance, could be added together and then distributed among the parties in equal shares.  This method of negotiating resolution is highly rational but lacks adjustment for the chore-doers’ needs, desires and preferences, all of which integrative or interest-based solutions address.    

My husband, for instance, does not enjoy but also does not terribly mind doing any of the following chores:  cooking for two; family finances; grocery shopping; gardening; car washing; and, running errands.  I am not wild about but do not hate making the bed, changing the sheets; cooking for dinner parties; doing the dishes; planning and maintaining our social calendar; and, doing the laundry. 

Like most couples, we haven’t sat down and divided our chores according to our interests or by principles of fairness.  We have nevertheless fallen into a routine where each of us has naturally gravitated toward those chores that appeal to us the most or bother us the least.  This natural, nearly unconscious manner of dividing work around the house is not distributive because we don’t experience this work as a single unified whole that must be divided between us.

What is burden for my husband – arranging flowers – is benefit to me.  In fact, those “chores” that we enjoy generally aren’t seen to be chores at all, but rather as happy diversions.  This is what my step-son meant when he reminded me that – to my husband – the daily maintenance of the general household happiness might be a chore, while it is a pleasure for me. 

When and how to use distributive, integrative, interest-based, positional, and principled negotiation strategies to solve your most pressing employment problem – that of setting compensation and benefits for your employees and partners -- will be the subject of my next guest post.

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To Be (Insured) or Not To Be (Insured)?

That is the question that employers face each day in Connecticut and across the nation when it comes to Employment Practice Liability Insurance (EPLI, for short).  The problem with such a question is that the answer is a classic "it depends".  For some employers, the answer may be an easy yes. For others, perhaps an easy no. But for the vast majority in the middle, it will depend on a variety of circumstances.

Michael Moore, of the Pennsylvania Employment Law Blog took a very solid start at looking at some of the issues employers should look at and what employers should know.  He lists the following five things that every HR generalist should know about EPLI.  There are other issues as well so I've incorporated Mike's great list with a few thoughts of my own.

• Coverage: Mike notes that "EPLI policies typically cover claims of wrongful discharge, workplace harassment and discrimination." Some may offer more coverage. 

Knowing what will, and will not be covered is important at the outset. After all, what good is insurance if it won't cover many of the common claims that an employer faces. 

• Exclusions. Mike notes EPLI policies "exclude many claims based on the statute that creates the legal right or the activity that gives rise to the claim" including FLSA, NLRA, WARN, COBRA, OSHA and ERISA. 

As with the coverage item, knowing what will be automatically excluded from coverage is important. Some employers believe EPLI is an umbrella type coverage that catches anything that relates to employment law. The truth is that most policies are written much more narrowly. 

• Policy Limits and Deductibles: As with any type of insurance, there will be policy limits and deductibles that usually apply on a per claim and aggregate basis.

In my view, this is an extremely important consideration for employers. Setting a high deductible may keep your costs down, but if the deductible is on a per claim basis, EPLI will do little to help a situation or control costs where an employer is faced with five separate employment law actions at once. 

• Defense Costs, Selection of Counsel and Settlement:  Mike's point here is a good one; he notes that because defense costs are usually included within EPLI this also "means that every dollar an employer spends defending a claim reduces the amount available for settlement or to pay a judgment. Since the existence of insurance coverage must be disclosed as part of discovery in most law suits, a plaintiff’s attorney will factor insurance coverage into his or her case evaluation."

However, often left out of a discussion is what happens when the insurer and the employer are at odds with a settlement. The employer may, for example, want to send a message to other employees that they will not settle out frivolous claims even for nuisance value. The insurer, however, may want to reduce the risk of exposure and want to settle the case. Employers often neglect to think about how EPLI will work with settlements and within its overall litigation strategy.

• Policy Types and Insurance Company Notification: Lastly, Mike notes that "EPLI policies are typically written on a “claims made” basis meaning that the claim must be incurred during the coverage period and reported to the insurer during an extended reporting period. Since employment actions may take years to turn into a claims, an employer may be left with no coverage if the policy is dropped or tail coverage isn’t purchased." I posted previously on the need to notify the insurer of such claims. 

With Congress considering changing various statutes of limitations on employment claims, this could have a further impact on EPLI claims as well.

There are other factors that an employer should consider as well. What will happen to a company's relationship with existing counsel? Will the insurer allow the employer to choose defense counsel? What is the insurer's "reputation" in the marketplace? What message will this send to employees? Will employees sue more knowing that they might receive a settlement? How will this work with an employer's arbitration provision?

EPLI is definitely not for every employer. Before you decide to go with such a policy, make sure to think through the issue to understand both the pros and the cons.  It may be that an arbitration provision (forcing the parties to go to arbitration) may be a viable alternative for some, while for others, maintaining the status quo will be best.

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Lately, the best soap opera in the area has been the on-again, off-again negotiations between Alex Rodriguez (otherwise known as A-Rod) and the New York Yankees. As a Yankees and baseball fan, it has provided lots of drama already in the offseason.  But the case has also provided a very good example of how to handle difficult negotiations. Whether it is for hiring or retaining a star worker, or negotiating a difficult settlement, there are some good lessons that we often preach, that show up here.

First, the background, as provided in two excellent posts by The Word on Employment Law which can be found here and here.   Essentially, Alex Rodriguez -- a three-time Most Valuable Player award winner who had one of the best regular seasons ever for a baseball player -- decided to opt out of his current  contract to negotiate a new deal.  The Yankees -- who were willing to negotiate with A-Rod as long as he didn't opt out because of some money they would receive from another ballclub -- had told him that if he opted out, they would not negotiate with him further.  When A-Rod opted out, the Yankees stuck to their word and cut ties with him.  The Yankees also said that they would not overpay him.

By press accounts, A-Rod was surprised by the results and perhaps surprised by the tepid market reaction to his free agency.  Thus, after apparently receiving advice from Warren Buffett , A-Rod did a unique thing -- he reached out to the Yankees personally, instead of letting his agent handle it.  And  the Yankees responded by encouraging him to have a face-to-face meeting with Senior Vice President Hank Steinbrenner (George's son).  After that, the two parties hammered out their differences in short order and are in the final stages of getting a new 10-year, $275 million contract signed. 

So what can HR professionals and in-house lawyers take away from this series of events? Plenty.

• Allow a party to save face to salvage negotiations.  When A-Rod reached out to the Yankees directly regarding restarting negotiations, the Yankees could've played hardball by saying no and leaking it to the press. They didn't.  Instead, they allowed the discussions to continue in private and until a framework could be established. They didn't pour salt in open wounds by calling A-Rod names for his opt-out, even with "anonymous sources".   Listen to this quote from Hank Steinbrenner shortly after word on the negotiations became public:

"Everyone seems to be pleased about it. I'm certainly pleased. Despite some cynical attitudes there may be over the next few weeks, Alex genuinely does not want to leave the team, and you really can't blame him, because we've got the talent to win. "

Doesn't sound like someone who is bitter; and it allowed A-Rod to save face and rejoin the Yankees.

• Don't nickel & dime. Ok, so with millions of dollars at stake, it's more than a few coins. But when A-Rod came back, the Yankees didn't restart negotiations at a much lower level (they did take into account the money that was lost by the opt-out but that makes some sense).  There is a tendency on some parties to nickel and dime at the end just to try to get the absolute best deal -- no matter what the cost is to the other side. But as another lawyer once told me, in words appropriate to the occassion, "when you get in the ballpark, get the deal done".   Getting a deal done for a fair value that you can live with that won't have a long-term impact the relationship, should be a goal of negotiations.
  
• There is no substitute for face-to-face negotiations.  Listen to this quote from Hank Steinbrenner:  "The meeting was a final get-together.  He wanted to make sure myself and my brother knew that he was sincere and serious."  In this day of e-mail and even cell phone calls, sometimes a short face-to-face meeting is all it may take to finalize a tricky deal.  Thus, when you're in litigation, take advantage of court-ordered mediations; you never know what can happen when the parties have to talk to each other.
  
• Consider talking directly to the opposing party.  Where there are lawyers involved, there is a tendency to let lawyers handle all the negotiations.  While that may be appropriate in many cases, it can also be a mistake in some instances. Some attorneys resort to the advocacy role too much, leaving hurt feelings and obstinence on the other side.  Having the parties talk directly with each other can resolve some of those feelings.
  
• Never be afraid to change your mind.  Parties tend to make absolute statements in negotiations. "This is my absolute final number" or, as here, "If you opt-out, we're not negotiating with you."  Hank Steinbrenner and the Yankees were wise enough to know that when A-Rod came to them looking for a deal that was within range of what the Yankees were willing to offer, he threw out his hard-line position.  Why? Because ultimately, he realized he could get what he wanted to begin with -- even if he had to go back on his original statement.   For parties negotiating difficult matters, never lose sight of what your ultimate goal is; when it's within reach, do what it takes to get there, even if it means overruling yourself once in a while.
  
• Don't be bullied.  This lesson is courtesy of The Word. 

Steinbrenner said no to baseball’s biggest star and held his ground. You have to do that sometimes, even with your stars.

There are very few people in this world who cannot be replaced in a company or an organization.  If those people try to hold a company hostage with claims of a "better deal" elsewhere, know what the market price is. If your compensation package is fair, hold your ground. You may not keep every A-Rod in your company who makes a threat to leave for more money, but you'll also earn the respect of other employees who know that the company won't be bullied by anyone. 

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