In law school I had to take two semesters of mediation and negotiation. Having been through a couple mediations myself, I found the courses very interesting and learned a lot about what I did right and what I did wrong in my own mediations. Mediation for workplace conflict gives two parties the opportunity to compromise and come to a win-win solution and oftentimes the outcome is much more favorable to both parties than a court ruling would be. But mediation also has its drawbacks. Let’s take a look at the pros and cons of mediating employment disputes.

The Benefits of Mediation for Workplace Conflict

• Cost-Effective: According to recent data, the average cost to defend an employment dispute in court can be up to $200,000. The average cost to mediate a claim is up to $10,000. In addition, mediation usually results in substantially less in potential settlement payout, seeking to substitute financial payout with alternative options.

• Faster Resolution: Taking a case through the courts can be a very lengthy process, with many courts booking hearings months out. Often it involves requesting discovery information from the opposing party, deposing witnesses, and preparing for a trial. All of which can take a great deal of time and result in substantial attorney fees. Mediation can often be scheduled within a couple months of the initial dispute notification and many issues can be resolved in one or two days, with a final decision being finalized within a few days of the mediation.
• Confidentiality: Unlike court cases, mediation is private, ensuring that sensitive information or disputes don’t become public knowledge, which can help maintain professional reputations. The relationship with a mediator is very similar to that of an attorney, meaning that you can speak to them confidentially and determine what information they can share with the opposing party. In addition, if an agreement can’t be reached and the case ends up in court, the mediator cannot tell the judge what was discussed or agreed upon during the mediation session.

• Preserved Relationships: Court cases can get very contentious, and often times both parties are left with hard feelings. Mediation fosters communication and understanding between parties, helping preserve or even improve working relationships. This is especially valuable when ongoing collaboration is necessary.

• Empowerment and Control: Mediation is about compromise. Both parties have a say in the outcome and can negotiate what that outcome looks like. If a case goes to arbitration or court, you are at the mercy of the arbitrator or judge to make a decision and that decision is binding. 

• Higher Compliance: Because both parties have participated in creating the agreement, they are more likely to comply with the resolution, resulting in a more durable and lasting settlement.

• Flexibility: Mediation allows for creative, non-monetary solutions that might not be available in a formal legal process, such as changes to workplace policies, training, or adjustments to job roles.

• Encourages Open Communication: Mediation promotes dialogue, helping both parties express their needs, concerns, and expectations, leading to better understanding and more effective solutions.

• Preserves Company Culture: Mediation can prevent disputes from escalating to a level that could damage the workplace environment, helping maintain a positive culture within the organization.

By addressing conflicts early and collaboratively, mediation provides an effective, mutually beneficial approach to resolving employment disputes.

The Downside of Mediation

• Lack of Binding Authority: Mediation agreements are generally not legally binding unless both parties agree to make them so. This means one party could potentially disregard the agreement, leaving the other party with no formal recourse unless they go through additional legal steps. If a court requires mediation, the agreement will be sent to the judge to approve, making it legally binding.

• Power Imbalances: Mediation between an employer and employee can create a power imbalance. The employer often times has more resources available to them to prepare and execute mediation than an employee does. The employer also has more power over the situation and can attempt to get the employee to agree to less favorable outcomes.

• Voluntary Participation: Mediation requires both parties to be willing to participate in good faith. If one party is not genuinely committed to resolving the issue or is just going through the motions, the process may fail, and the dispute could escalate further.

• No Guaranteed Resolution: While mediation can facilitate communication, there’s no guarantee that the dispute will be resolved. If the parties cannot come to an agreement, they may still need to resort to litigation or arbitration.

• Pressure to Settle: Mediators may encourage a settlement to avoid prolonged conflict, which could pressure one party into agreeing to terms they don’t feel comfortable with, leading to dissatisfaction with the resolution.

• Limited Expertise: While mediators are trained to handle disputes, they may not always have the same level of expertise in legal or technical issues as a lawyer or arbitrator would. In some cases, this could lead to an inadequate resolution or overlook important legal nuances.

While mediation for workplace conflict can be effective and efficient, it is not without its limitations and risks. It’s important to carefully consider the nature of the dispute and the dynamics between the parties before opting for mediation.

If you’re facing an employment dispute, consider whether mediation might be the right path for you. It’s a cost-effective, faster, and often less adversarial way to resolve conflicts while preserving important professional relationships. However, it’s essential to look at each situation independently and determine the benefits and limitations mediation would have in each case.