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New ABA DR Section Ethics Opinion Sets Out Limits on Mediator Disclosure (Web)

Put on your neutrals’ cap and weigh in this mediation dilemma:  An employer tells you, in a private caucus meeting, that not only has it filed the suit you are mediating against its ex-employee, but it also has turned the matter over to law enforcement.

How can that fact be conveyed to the defendant ex-employee in pursuit of a settlement?

The American Bar Association Section of Dispute Resolution's Committee on Mediator Ethical Guidance tackled the question yesterday.

In SODR-2009-2 (May 13, 2009)(available here), the committee’s fifth ethics opinion and second this year, the advice is for the mediator to “ask some questions that do not make direct or indirect references to the confidential caucus communications, but that still allow the employee to consider the possible consequences of failing to settle in the mediation.”

The committee was addressing an actual question submitted by a practitioner, according to Paula Young, a law professor and director of the Lawyer as Problem Solver Certificate Program at  Appalachian School of Law in Grundy, Va.  

The mediator-query writer described a mediation situation that the query writer had encountered twice.  Both times, a company filed suit against a former employee “for the unauthorized taking and/or duplication of the employer’s sensitive electronic data” before the employee left the job.

The mediator continues:

In the course of speaking with both employers in separate caucus, I've been advised, in a rather off-hand manner, that the employers have initiated some form of referral of the case for prosecution to the police/district attorney regarding the alleged unauthorized taking/duplication by the employee of the employer's sensitive electronic data.  

The query acknowledges that the employer’s attorney is barred under ethics rules from trying to negotiate the civil case settlement by offering to drop the criminal filing.  It also states that in neither case did the employer ask the mediator to bargain on the company’s behalf using the criminal charges as an incentive.

So, the mediator asks, what, if anything, should be said to the former employee and his attorney?  The query continues:

I certainly don't want to indirectly engage in a form of unethical bargaining that the employer's counsel would otherwise be prohibited from pursuing.  On the other hand, I feel a very strong sense of moral obligation to the employee to alert him to a very real world risk of a possible forthcoming criminal prosecution if he fails to successfully resolve his pending civil dispute with his former employer.

The committee carefully warns that the Model Standards of Conduct for Mediators prevent direct or indirect disclosure of confidential caucus information.  But the solution, according to the committee, is to ask questions that avoid disclosures about the company’s revelations, but are directed at raising the potential criminal prosecution issue in the employee’s mind.

“For instance,” notes the eight-page opinion in its summary, “a mediator might more generally ask: ‘If you do not settle this matter in mediation, what likely options exist for both you and the employer to resolve the issues arising from your departure from your job?’  Or: ‘What risks do you face if you do not settle this case?’”

Furthermore, the opinion advises that where the employee is represented, the mediator “may reasonably assume that this counsel, if at all experienced in the area of employment law,” would anticipate, advise, and plan for a possible criminal prosecution.

In that context, mediators are off the hook.  The opinion’s summary answer concludes, “Accordingly, the mediator need not convey in the mediation the fact of a criminal prosecution referral when that prosecution is implied by the context of the dispute.”

In preparing its analysis, the committee focuses on Model Standard V(B) on mediator confidentiality surrounding caucuses.  It also conducted analysis based on a Model Standard section dealing with party self-determination, as well as a rule that says that mediators “should promote honesty and candor between and among all participants.”

The opinion, after weighing the limits of disclosing confidential caucus information “directly or indirectly”  under the code, concludes that “the mediator can use general reality testing questions to ensure that the party has considered risks associated with not reaching a mediated settlement.”

–Russ Bleemer, Editor, Alternatives