How to Settle A Case Before Arbitration
Don't Worry About Projecting Weakness
Many experienced arbitrators will ask the advocates before the hearing whether they’ve discussed settlement. Often the parties have, but didn’t resolve it, which is why the matter is moving forward. In some cases, however, the parties admit that they’ve never broached the topic. The arbitrator may ask some probing questions to see whether it’s worth delaying the hearing to attempt settlement. As I mentioned last week, Canadian arbitrators routinely act as mediators under these circumstances, whereas most American arbitrators avoid taking on two different roles.
Why parties don’t settle
Often, the reason a case hasn’t settled is because no one has been willing to raise the subject with the other side. If a client has prohibited an advocate from trying to settle the case, the advocate shouldn’t raise it with the other side. But if there’s even a remote chance of settlement, it’s worth approaching the other side.
Some people are afraid it will appear as though they think they have a weak case. The other side might even read it this way. That shouldn’t be a hindrance to starting the conversation, however. You could have the strongest case in the world and still prefer to settle it. It can save money, it can avoid setting a precedent, and it can take even that remote possibility of losing off the table for the client. Remember, settlement must be reached by both parties, so if the final terms aren’t acceptable, settlement doesn’t happen.
How do I start the conversation?
First of all, be aware of the cancellation period for the arbitrator and start the conversation before the cancellation fee will kick in. This is a good way to start the conversation.
“It looks like we’ll have to pay a cancellation fee if we cancel this after next Thursday. Has your client given any thought to settlement? It might be nice to avoid paying the fee if this matter is going to settle anyway.”
Another approach is to test out the strength of the other side’s conviction about their case or their dedication to an expected remedy.
“Just calling to see if ACME is dead set against reinstatement. We might be able to settle this if they’re willing to put Marla back to work.” or “Just calling to see if Marla is dead set on coming back to work. If she’s moved on, we might be able to settle this.”
If the client hasn’t really committed to the idea of settlement, you can let the other side know that as well.
“Before I get too far into prepping this case, do you know if the union and the employer ever discussed settlement? Do you know what happened with that?”
In contract cases, it’s worth noting how long it will be until bargaining starts. If the contract is almost expired, it can be better to put energy into negotiations rather than starting with a losing arbitration award.
“We might not even get an award until we’re in bargaining. Why don’t we agree to settle this grievance without precedent and take this up at the table?”
On the other hand, that can make it hard to settle; the parties might prefer to have the matter dangling out there until bargaining is well underway. In that case, it helps to bundle a couple of grievances together and agree to hold them in abeyance until after bargaining, in case you are able to resolve any of the underlying issues at the table.
Should we settle?
As I noted at the outset, there are some cases that a party will not settle. There are usually bigger principles involved and that’s fine. You can even let the arbitrator know that in an opening statement. If that’s not the case, then you should be considering settlement while you are preparing the case, listening to for clues about what a grievant’s real interests are, and whether those interests can be better achieved through a negotiated settlement.
More times than I care to remember, the last thing a grievant told me as we were wrapping up a prep session was that they’d already gotten a new job, or that they just needed six more months as a bridge to retirement. You don’t need to run straight to the other side to tell them but it’s a great piece of information to have when you are broaching settlement with the other side. On the flip side, an employer may let it be known that they could really use someone with the grievant’s skills, or that the antagonist in the situation has moved on and they never really had a problem with the grievant in the first place. Sometimes, it’s a witness that shares this information and the client wasn’t aware of all the factors at play.
A Few More Tips
Thousands of gallons of ink (and digital bytes) have been spilled on the topic of Negotiations. If you aren’t able to take a class on the topic at a local college or bar association or through your union, I recommend reading blogs (like this one), books (like Getting to Yes), and shadowing more experienced practitioners at the stage of the grievance when they might broach settlement. I also recommend having a settlement agreement ready with the important terms left blank. That way the other side can review it before the matter is wrapped up but the papers can be signed quickly if it settles. If you don’t have a template settlement agreement handy, do not hesitate to use a piece of paper to handwrite a tentative agreement for everyone to sign. Getting people’s wet signatures helps them feel invested in the negotiated outcome and the legal paperwork can be provided soon after.