Josh Goodbaum: Hi, Amanda.
Amanda DeMatteis: Hi, Josh. What are we gonna talk about today?
Goodbaum: I want to talk about negotiation. So, let’s imagine that a client comes to you; they’ve been terminated from their job; they tell you their story; and you say, “I think you have a really strong case of discrimination. I think if we try this case, you’re going to win.”
The client retains you, you approach the employer, and the employer says, “Amanda, what does your client want to resolve this thing?” So, you go back to your client and you say, “It’s time to negotiate,” and the client says, “Wait a minute, I don’t want to negotiate. I want a trial. You said I’m gonna win. Why are we negotiating?”
So, Amanda, why do we negotiate in employment cases?
DeMatteis: There are so many reasons to negotiate for a settlement, Josh.
At the start, it’s so important to realize when you are a litigant in an employment case that – chances are – your case is gonna settle anyway. Very very few employment cases actually see the inside of a courtroom for a jury trial. In fact, of employment cases that are filed in federal court, 97% to 98% of them are resolved without a trial. So, if you’re a plaintiff, you’re gonna get posed with this question at some point by your employment lawyer: “Hey, what is it gonna take to settle this case?” Why is your lawyer asking you? Because the other side is asking us. The reality is a lot of these cases settle.
But let’s talk about 5 different reasons why it might be in your best interest to settle your employment case, as opposed to becoming one of those 1 or 2% that actually sees the inside of a courtroom for a jury trial.
Number one is certainty and control. Whatever has happened to you at work probably was outside the bounds of your control. You had this job, but it ended. Maybe you were terminated. Maybe you were constructively discharged. This employment relationship has come to an end, and it’s likely that you didn’t want it to end. A negotiation and a settlement allow you to regain control of this situation and make a decision that is certain – that is, a complete resolution of a claim.
If you, in fact, go to a jury trial, you don’t have that level of control. You don’t have that level of certainty. A jury of your peers is going to decide the issue. They’re going to decide whether or not you were discriminated against, whether or not you were retaliated against. They’re gonna judge you as a witness. They’re gonna determine whether or not they find you credible. You are in that proverbial hot seat. And in a negotiation, you’re not. You get to take whatever situation finds you at that negotiation table and write the ending to that story, as opposed to letting someone else do it for you, and that’s really valuable.
Number two, there’s a lot of variables in litigation. Things change over time. Witnesses die. You get a phenomenal job that you weren’t expecting, and your economic damages are much lower. Maybe you get ill. Maybe people aren’t available to testify anymore. We just don’t have control over that. One of my favorite things I say to clients is, “Jeez, if I just had a crystal ball, right?” We don’t have that in litigation. So, we need to deal with ever-changing variables.
Josh, you said that maybe this is a case where I’ve told the client, “You have this great case, and I really think we’d be successful at trial.” That’s on that particular day. There’s a lot of different things that can change over the course of time, and maybe that advice isn’t the same anymore because of all the different things that have changed. So, why negotiate? Because we get to close off the universe of possibilities. And we get to say we’re going to make a decision about this case with the information that we know right now.
Number three is the time-value of money. Now I’m no economist or accountant, but what I can tell you is a lot of people like a settlement now as opposed to later. If you got $100,000 today versus $100,000 in 3 years and after a lot of attorneys’ fees and a whole heck of emotional time and energy spent, what’s more valuable to you?
So you have to do that basic math when you’re thinking about whether or not it makes sense to negotiate. “Well, if I do this now, I’m gonna get X. If I go through this process for a considerable period of time, and put in a lot of sweat equity and emotion, what is my outcome gonna be? And what’s the delta between those two numbers? Does it make sense to take an offer that is on the table now versus waiting to see what that upside can be?” And the only way to really know the answer to this is to talk to your lawyer and have an idea of, on that particular day, if everything goes right, how much is that case worth versus what the defendant is actually willing to pay right now.
The fourth reason is anything’s possible in negotiation. When you try a case to a jury, guess what? The only thing they can do for you is give you money. That’s the way our civil justice system works. That’s all you can get. You’re never gonna get an apology. You’re not gonna get a pat on the back. You’re not gonna get a letter of recommendation. You get money, and that’s it.
In a negotiation setting, anything’s possible. Maybe you want to be paid in 2 tax years. Maybe you want some amount of this money to go to economics and some amount to go to non-economics. Maybe you really do need that letter of recommendation for a new job. Maybe we need to really think about our messaging to the community that you are leaving, and how you want to present this departure. Is it a resignation? Is it a termination? Is it a “I got another job”? You have that level of control in a negotiation setting. So, everything’s on the table. Once you put it to a jury, all of that opportunity and possibility to really structure this settlement in a way that is going to make the most sense for you is gone.
Fifth and finally, and maybe most important, is closure. I say to people all the time, “I’m sure you love talking to me, but it would be really nice for you to not have to deal with this anymore, and to not have to deal with lawyers, and hear about strengths and weaknesses, and what damages are, and what the economic losses are, and what getting a new job means, or, oh my God, my dog died, is that gonna impact my non-economic damages?” You don’t have to deal with any of that anymore. It ends.
And number 5 really relates to number 1 with that certainty piece and that control piece. There’s so much value in closure, and people, especially in really egregious cases – think sexual harassment cases, think really egregious discrimination case – folks have to continue to relive this thing constantly, right? You’re getting deposed. You’re in court. You’re listening to people making credibility arguments against you, making claims about your work performance, and what you didn’t do right at the job. It’s a nasty fight sometimes, and it’s hard to keep getting up, brushing it off, and getting back in the ring. And you don’t have to do that if you decide to settle this case.
Now, it may sound like I’m trying to sell you on a settlement, and that’s just not the case. What it is really important that you do, though, is analyze these things. Talk to your employment lawyer. Talk to your family. Take a good look internally at yourself and think about what’s going to be best for you. Remember, any resolution of a case is not about, “Well, I want to make the other side hurt.” It’s about what can I do to put myself in a better position and end this dispute? So, concentrate on you and no one else, and likely, it’ll lead you to the right decision.
Goodbaum: That’s such great information and analysis, Amanda, and it’s gonna be useful to so many people facing a really difficult decision about whether to continue to fight for a total victory in their employment case or reach a resolution that’s more of a compromise.
Thank you all for watching. We’ll see you next time.