Be Wary of “Binding Mediation”

Over the last 100 years, High Swartz attorneys have engaged in countless cases involving alternative dispute resolution, representing litigants in arbitrations and mediations and serving as arbitrators and mediators.   Recently however, I have noticed a newer concept being incorporated into contractual provisions and settlement discussions:  “binding mediation”.  Such a provision raises immediate questions.  What is binding mediation?  Is this something that a party should agree to?

While not widely used, or even widely known about, binding mediation is a form of alternative dispute resolution.  Alternate dispute resolution is, generally speaking, a collection of methods of resolving disputes outside of court.  In the arbitration method of alternate dispute resolution, the parties conduct a evidentiary hearing before a neutral arbitrator, or panel of arbitrators, that decides the case as would a judge and jury.  Except in very limited circumstances, and unless the parties expressly agree otherwise, the parties are bound by the arbitrator’s decision, and there are very limited rights of appeal.  The arbitrator’s decision can be entered as a judgment in court, the judgment can be enforced, and assets of the losing party can be seized to satisfy the judgment  In a mediation, there is no evidentiary hearing.  A neutral mediator listens to the various positions of the parties and facilitates their settlement discussions.  In mediation, there is no “decision” to be binding.  The culmination of the mediation is either a settlement acceptable to both parties, a partial settlement acceptable to both parties, or the parties leave without their dispute resolved.

“Binding mediation” therefore would seem to be a contradiction in terms, and is often discarded as a viable option.   There is no statutory definition or even universal understanding of what binding mediation even means.  Some consider it to be a traditional mediation, except that the parties are expressly bound by any agreement they reach.  Others consider it to be a traditional mediation, but if the parties do not settle, the mediator determines the final settlement somewhere at or between the final positions of the parties.  Still others believe it is simply another term for arbitration.

Case law highlights that the term is vague.  In Pennsylvania, the Superior Court addressed binding mediation in its unreported decision Miller v. Miller, 2016 WL 6301602 (Pa.Super. 2016), when it found that because the parties used the word “binding” it meant that they were agreeing to an arbitration, despite the use of the word “mediation.”  In Connecticut, the Appellate Court found in the case of Tirreno v. The Hartford, 129 A.3d 735 (Conn.App.Ct. 2015) that binding mediation was not an arbitration, and thus not subject to that state’s Arbitration Statute, particularly since there was no hearing.  However, the mediation decision in Tirreno was nonetheless found binding in the context of a petition to enforce a settlement that was pending was before the court.

While there is no clear accepted definition, what is clear is that if you are going to enter into a binding mediation agreement, simply referencing the process by name is not sufficient to protect your rights.  You must clearly set forth how the process will be conducted, how the decision will be treated, and how the decision will be enforced.

Is it a good idea to enter into a binding mediation agreement?  Since you are potentially giving up your rights to a hearing, to examine and challenge evidence and the ability to cross examine witnesses, it would seem that it is rarely a good choice, particularly in an agreement addressing prospective disputes.  However, binding mediation may be appropriate in some circumstances, such as when a dispute has arisen, there are relatively few material facts in dispute, there is a clear mutual understanding of each party’s positions and the scope of the mediator’s authority (such as monetary limits) is clearly defined.

If you have any questions about binding mediation, please contact Richard C. Sokorai at 610-275-0700 or rsokorai@highswartz.com. Our Bucks County and Montgomery County Litigation attorneys  have knowledge and experience in all facets of arbitration and mediation.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

An Employer’s Responsibility to Returning Military Veterans

August 21, 2015

By Richard C. Sokorai, Esq.

When an employee has to take a leave from his or her job because of a military deployment, the send-off can be very moving.  Sometimes the patriotic employer will even throw a thoughtful send-off party, express how the employee will be missed and assure the employee that his job will be there when the employee gets back.

However, as time goes by, the employer’s situation may change.  Deployments can sometimes take longer than expected.  Perhaps the employer will experience a downturn in business or otherwise re-organize.  Perhaps the employer will find what was intended to be a temporary replacement for the deployed soldier, but after time due to performance or continuity, wants to keep that employee in lieu of the deployed soldier.  Patriotism aside, the employer has a business to run and these circumstances can create difficult situations upon the employee’s return from the deployment.  How is the employer to handle these difficult issues?

An Employer’s Responsibility to Returning Military Veterans
An Employer’s Responsibility to Returning Military Veterans

These situations are covered by Federal law, specifically, the Uniformed Services Employment and Reemployment Rights Act (USERRA).  Under USERRA, employees that are called up for Reserves or National Guard duty are considered a protected class, and can’t be discriminated against based upon their military service or obligation.  There are also very strict requirements that cover the re-employment of these individuals.

So, as an employer, what are your responsibilities to that employee?

For the most part (there are exceptions not covered in this article), employers are required to re-employ workers who have been honorably discharged or who’ve satisfactorily completed their military service in the Reserves or National Guard, as long as the employee requests reinstatement in a timely manner.

Even if you have a new employee that replaced the deployed employee, one that you may like better or who you may think does a better job, you have an obligation to re-employ the returning soldier, even at the expense of terminating the replacement employee.

For employees that suffer a disabling injury while on active duty, the employer is required to reasonably accommodate the returning employee and allow him or her to perform the duties of the job they would have had had they not been called up. If that job doesn’t exist, the employer must make every reasonable effort to find a job the employee can perform that is the nearest approximation to the previous position.

If there was a reduction in force while the employee was deployed, or the job was merely temporary, and the employee would have lost their job even if they had not been deployed, the organization doesn’t have to rehire the employee.  But understand that this decision may be closely scrutinized.

It is also important to understand that when you rehire your employee, you must treat them as if they have never left.  This means that any promotions, seniority or raises that they would have received had they not been deployed, must be afforded to them upon their return.

Lastly, depending on the length of the call-up, the employee may also be exempted from Pennsylvania’s “at-will” employment doctrine, meaning they may enjoy a period of time following their deployment where they can only be discharged “for cause.”

There certain procedural and technical requirements that apply and which may modify or eliminate some or all of the above requirements.  Close consultation with your attorney prior to making any such employment decisions will offer you significant protection in navigating this legal minefield.

Most American citizens agree that those that serve in the military are vitally important to our way of life, and therefore should be protected for the sacrifice they make. Most American employers are patriotic and support their military employees, but also have competing interests, such as the protection of their business, their families and duties to shareholders. USSERA is the framework that ensures the employer makes such employment decisions with the appropriate balance.

For more information feel free to contact Rich Sokorai at (610) 275-0700 or by email at rsokorai@highswartz.com.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.