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Expanding abroad opens your company up to … new limits? Somewhat paradoxically, the increasing globalization of companies that used to be strictly U.S.-based has in some respects underscored the differences, rather than the similarities, in employer approaches, depending on location, to the protection of confidential and proprietary company information and property.

In the United States, use of restrictive covenants is common for key executives who carry company good will. There is a good likelihood of enforcing covenants that meet basic reasonableness criteria.

But outside the United States, the use of such covenants is much less commonplace. Even when the covenant is governed by U.S. law, enforcement remains much more problematic, and even if a company obtains a U.S. federal or state court judgment, despite international treaties. Outside the United States, enforcement can be an uphill battle.

The most effective way to surmount these problems and to create a uniform company-wide strategic approach is to use arbitration as the enforcement mechanism, rather than U.S. courts (which may lack jurisdiction) or foreign courts (which will likely view the covenant with disfavor). For the global company, ADR should be a preferred component of the enforcement toolkit deployed to protect confidential and proprietary company assets.

DIFFICULT CHOICES

A company that requires or seeks to enforce restrictive agreements only for its U.S. workforce and not for similarly situated personnel working outside the U.S. is likely to have enforcement problems even in the United States.

The obvious issue is that it becomes quite difficult to establish that a restrictive agreement is reasonably necessary for protection of specific company interests in the home state or country if the same interests apparently require no protection in other, non-U.S. jurisdictions.

This creates a compelling reason to try to treat similarly situated employees consistently around the world.

At the same time, in planning a company-wide restrictive covenant strategy, it is important to recognize that efforts to enforce apparently reasonable restrictive agreements outside the United States generally yield different results than enforcement efforts that play out within the U.S. Senior executives who seek to impose restrictive agreements on a global workforce may find that undertaking counterproductive if the covenants are held unenforceable in key cross-border situations. One such bad outcome may embolden other employees to flout their covenants upon departure.

The result is the exact opposite of the sought-after deterrent effect.

MAKING IT WORK

But there are ways to arrive at a contractual approach that can work both in the United States and elsewhere.

In order to do so, it is important to define what the company’s goals and interests are, and to understand what the likely enforcement results will be with respect to those goals and interests before a company adopts a specific restrictive covenant program. Such an analysis enables management to make an informed decision as to how the company’s interests can be best served world-wide. The dialogue must involve both business people and lawyers.

If a business executive is pressed to explain why he or she wants to make company personnel subject to restrictive agreements, the response typically will include one or more of six frequently mentioned goals:

• To protect the company’s confidential and proprietary information;
• To stop employees from competing with the company when someone leaves to set up his or her own shop or to go to a competitor;
• To stop an employee from poaching the company’s customers following his or her exit;
• To stop a departing employee from taking some of the company’s employees with him or her;
• To create a deterrent effect that will encourage other employees to comply with their restrictive covenants; and
• To punish misbehaving personnel.

These are all perfectly legitimate goals. But only some, not all, of them are realistically achievable in an international setting.

If a company has genuinely confidential or private proprietary information—and most companies do—the protection of that information is eminently attainable in many foreign jurisdictions, provided that there is a contractual undertaking to that effect.

In the absence of such a contractual restriction, there are a number of economically important countries where no duty of confidentiality would otherwise be owed post-employment. Thus, a permanent confidentiality requirement should generally be imposed on all employees with respect to the company’s confidential and proprietary information.

The company should be prepared to enforce that agreement actively. It should expect to succeed in enforcing such confidentiality worldwide. The two caveats are that (i) a restriction on the use of confidential company information will only protect information that truly is confidential or proprietary, and (ii) vigilant enforcement is required, or else even information that really is entitled to protection will be deemed to be of no particular importance.

Hence, once a company adopts a contractual confidentiality requirement, the company must be prepared to enforce it across the board. And when it brings an enforcement action, the company also must be prepared to make a compelling confidentiality showing as part of its case.

By contrast, to stop an employee from competing or from soliciting company customers or employees is much more difficult. Many foreign jurisdictions view such provisions as antithetical to free enterprise. Even when a restrictive agreement is clearly governed by the laws of a particular U.S. state, a non-U.S. forum may find noncompetition and non-solicitation provisions void as against the public policy of the place where the employee lives or works.

Even if a non-U.S. forum is willing to accept such provisions as valid and is theoretically willing to entertain the prospect of issuing injunctive relief, interim remedies are often hard to obtain. While a permanent injunction may be conceptually more palatable than an interim measure, even Protecting Your Interests so-called “permanent” enforcement measures are frequently limited abroad to a shorter period than might be deemed reasonable in the U.S.

The result is that, by the time the forum is ready to act, the restrictive period may have run out. In fact, a savvy former employee may deliberately delay the proceeding simply to run out the clock. Moreover, even if the agreement specifies that such proof is not necessary, many jurisdictions require some evidence of actual harm as a prerequisite to issuing an injunction, and that may be quite difficult to prove. For all these reasons, the likelihood of obtaining injunctive relief is significantly reduced for employees who work outside the United States.

REASONABLENESS AND ADR ARE KEYS TO EFFECTIVENESS

Despite these constraints, it is still possible not only to protect confidential information but also to create the desired deterrent effect.

Employers should be made aware, however, that interim and even permanent injunctive relief will likely be quite difficult to obtain outside the United States. It may not even be worth the cost of pursuing such relief.

If an interim or permanent injunction is sought but not obtained, the former employee will have a victory that you can expect him to publicize, and other employees may find that instructive and empowering. Accordingly, the company’s interests are probably better served by focusing on other forms of relief that are more likely to spur compliant behavior.

There are three simple mechanisms for doing so.

First, for employees who own unvested equity interests, a restrictive agreement can prescribe automatic forfeiture of those interests as one remedy in the event of established non-compliance with the agreement, provided that this is not in conflict with local law or the company’s organic documents.

Ironically, this typically matters to employees. (It also permits the firm to feel that it has indeed extracted the requisite pound of flesh for employee misconduct.) Employees actively fight against enforcement of forfeiture provisions. That seems to be because, even when an employee has voluntarily left and is engaging in conduct that is detrimental to his or her former employer, the departed employee still wants to reap the value of any equity that he or she continues to hold in the company.

Second, a restrictive agreement can stipulate that damages will be awarded for harm caused by the proscribed solicitation of established company customers and of active company customer prospects.

But again, to prove actual damages is often a difficult quantitative exercise. Lost revenues are not typically acceptable as a damages measurement; it is lost profits that matter. And quantifying lost profits may entail revealing profit margins that a company may not wish to disclose, particularly to a competitor and especially if interested customers are following the litigation.

The simple alternative is to include a reasonable liquidated damages provision in the restrictive agreement. So long as the agreement specifies that actual damages are likely to be difficult to quantify and the liquidated sum appears to be a reasonable proxy for actual damages, a foreign forum is likely to find this a palatable approach—unless such liquidated damages are void as against public policy in the forum.

And, finally, a restrictive agreement can provide that an employee who is found to have violated his or her covenant will be liable to pay the company’s legal fees and costs. Such cost and fee shifting is relatively common outside the United States, and can lead to a fees award that dwarfs actual or liquidated damages.

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In sum, in the global setting, unless local law makes one or more of these provisions unlawful or otherwise inappropriate, a restrictive agreement should contain (i) a permanent proscription on violating confidentiality, (ii) a reasonable temporal prohibition on solicitation of key customers and customer prospects with whom the signatory employee has had a nexus in the year or two preceding his or her departure, and (iii) a reasonable temporal proscription on the solicitation of employees with whom the signatory has had personal interaction in the year or two before he or she leaves.

But the company should understand that injunctive relief will likely only issue to protect its confidential and proprietary information, and that the non-solicitation prohibitions are better protected by the alternative means discussed above.

Further, the company should recognize that the sought-after enforcement results are probably easier to obtain in international arbitration than in foreign courts. This will of course have an effect on the dispute resolution provisions of the restrictive agreement. A restrictive agreement that will be used in the international context should always provide for international arbitration in lieu of resort to any court. Even interim remedies can be obtained from an arbitrator and, indeed, there is a greater likelihood of obtaining such remedies outside the United States from an arbitrator than from a court.

The CPR Institute presented its 30^th Annual Academic Awards for Excellence in Alternative Dispute Resolution at a Jan. 17 dinner at the Lodge at Torrey Pines in La Jolla, Calif.

Seven awards were presented at the event, which took place during the 2013 CPR Institute Annual Meeting. For photos, and a list of the 20 awards judges and their affiliations, as well as information and features on past winners, please visit www.cpradr.org/Awards/AnnualAwards.aspx.

The James F. Henry Award, named after the CPR Institute’s founder, and presented for leadership, innovation and sustained commitment to the ADR field, was presented to JAMS neutral Margaret L. Shaw. For details on Shaw’s award and work, as well as past Henry Award winners, see “New York Practice Leader Margaret Shaw Receives Sixth James F. Henry Award,” 31 Alternatives 47 (March 2013).

Here is the remainder of the awards recognizing 2012 work:

The Outstanding Practical Achievement Award was presented to the Foreclosure Mediation Unit at the Sandra Day O’Connor College of Law, Arizona State University, in Tempe, Ariz. The unit was created by the law school’s Lodestar Dispute Resolution Program to provide mediation services between lenders and residential borrowers facing foreclosure, as well as conduct housing-related programs for the general public.

Soon after the Foreclosure Mediation Unit was opened, it was enlisted by the U.S. Bankruptcy Court for the District of Arizona to administer a program that assists the court in managing residential mortgage and foreclosure cases. The program provides guidance for facilitated negotiations in contested lift-stay hearings under 11 U.S.C. § 362.

The goal is to help assist in easing court congestion and support mortgage modifications or negotiated settlements for debtors and secured creditors. O’Connor College of Law students are trained to work in commercial mediation under the supervision of licensed practitioners. The students have the opportunity to observe, co-mediate and participate in the unit’s program administration.

Timothy Burr, director of the Foreclosure Mediation Unit, and Art Hinshaw, director of ASU’s Lodestar Dispute Resolution Program, accepted the award at the dinner.

Information on the Foreclosure Mediation Unit can be found at http://bit.ly/XbXgxi. The program was nominated by Robert F. Copple, who heads his own law and ADR firm in Scottsdale, Ariz. Copple, long active in the CPR Institute, is a member of CPR’s Patent Mediation Task Force.

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New York conflict resolution practitioner Irene Warshauer, a veteran CPR Awards judge (and editorial board member of this newsletter) introduced the awards for the Professional Articles, and accepted them on behalf of the winners.

The long-form law review winner was “Mediation: The New Arbitration,” by New York academic Jacqueline Nolan-Haley, a law professor at the Fordham University School of Law. The article focuses on mediation’s relationship to arbitration, and concludes that the latter adjudicatory process is hurting the general utility of mediation as an alternative to litigation.

Mediation’s “loss of identity” as it moves “toward the arbitration practice zone,” writes Nolan-Haley, “limits the spectrum of options available to disputing parties, leaving them with a single forum with variations of adjudication. This deprives parties of the primary benefit of mediation—a type of mercy, which provides relief from the rigidity of the formal justice system, with its adversarial orientation.”

Nolan-Haley traces the evolution and rise of mediation practices and declines in arbitration. Then, she focuses on lawyer’s “aggressive behaviors” in mediation advocacy, evaluation, and hybrid med-arb processes. She conducted a study of lawyer mediation behaviors, and provides empirical results, which demonstrates the negative effects of mediation’s migration toward arbitration processes and behaviors.

The article explores why “legal mediation” is shifting toward arbitration. It concludes that the move “is problematic” for the justice system, and for dealing with disputes generally. Noting ethical, pedagogical and public policy concerns, Nolan-Haley concludes that “[w]e need more skilled and better trained and equipped mediators to [rein] in the unbounded and overly zealous advocacy displayed at mediation.” She also supports better practice standards, revising the ABA Model Rules of Professional Conduct to focus on attorneys’ mediation caucus conduct, and more collaboration between counsel and neutrals.

“They should make clear,” Nolan-Haley writes, “that the mediator, not the advocates, is in control of the process.”

The article is published by the Harvard Negotiation Law Review. See 17 Harvard Neg. L. Rev. 61 (Spring 2012)(available at http://bit.ly/QvKdpe).

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Warshauer introduced the professional “short article” award for Charles B. Rosenberg and Matthew T. Parish, “Investment Treaty Law and International Law,” 23 Amer. Rev. of Int’l Arb. 1 (August 2012)(available for fee or with Lexis subscription here: http://bit.ly/XTghUJ).

The article addresses the knotty issue of investment arbitration decisions that attempt to reconcile conflicts with treaties and other areas of international law. Investment treaties provide recourse for foreign investors when their investments have problems in the country in which they are made.

The treaties provide for arbitration, which is supposed to increase the potential for investments so that foreign companies aren’t subject to a home-court advantage in the nation’s courts. Usually, a treaty invokes protections against actions by a foreign government.

The article focuses on three recent international cases that examine the relationships between treaty tribunals and enforcement. It also addresses how the European Court of Human Rights views its jurisdiction in relation to arbitration awards, noting that the court has recognized that investors have a right to have their award enforced.

The article also examines the “intra-EU” bilateral investment treaties that have arisen because of the integration of the old Eastern Bloc into the European Union. No consistent line of analysis on enforcement has emerged in those situations, the article says.

The article concludes that international investment law generally trumps other areas of international law.

Coauthor Parish is a partner in the Geneva office of Holman Fenwick Willan; Rosenberg is a legal adviser at the Iran-U.S. Claims Tribunal in the Hague, Netherlands.

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David H. Burt, corporate counsel to the DuPont Co., had glowing words about how much he enjoyed Grant Strother’s Outstanding Student Article in presenting the 2012 award for award to the former Harvard Law School student at the CPR Awards dinner.

Strother won for his paper “Resolving Cultural Property Disputes in the Shadow of the Law,” which had been prepared for a class. He graduated last year, and is an associate in Davis Polk’s litigation department and works in the firm’s Menlo Park office. The article, which is expected to be published next spring in the Harvard Negotiation Law Review, is available at http://hvrd.me/XGzKdX.

The article focused on the effect of laws on the tenor and direction of conflict resolution efforts. The context is cultural property law, which crops up in a wide variety of disputes, but is most familiar as issues between cross-border parties over historic artifacts. The players may be art collectors, companies, or governments.

Strother frames the problem in a hypothetical disagreement resulting in claims by foreign governments for the restitution of object from a U.S. museum.

Said David Burt at the dinner, “This paper is first a very sober recounting of the laws … when a foreign government requires the return of a [looted] antiquity from the U.S. government.” Burt explained that rights are murky and relationships may not even exist.

In his article, Strother writes that cultural property disputes “present an interesting challenge at the intersection of law and negotiation.” The matters rarely get into courts, he notes, relying on private discussions. He recounts the national and international laws that apply, but states that they aren’t effective for resolving the disputes. The paper argues that though the legal rules “seem to have a low likelihood of enforcement,” they are still “significant in cultural property dispute[s]” because they “shape[] bargaining over cultural property.”

Strother proposes ADR for property dispute resolution. He writes that the law should focus parties on interests within the dispute. He suggests incorporating ADR—arbitration, mediation or “collaborative law in negotiation”—into international cultural property law, which would make use of it “high obligation,” and provide “institutional and constituent shade” for using interest-based processes.

Strother also suggests using “low obligation” international law methods, such as nonmandatory pushes to negotiation and interest-based bargaining resources and techniques.

“The possibility of enforcement of cultural property legal rules brings parties to the table,” Strother writes, concluding, “Enforcement is unlikely, and yet the legal rules are still influential in the way that they focus the discourse of the dispute resolution process on rights and power rather than on the interest of the parties, mostly to unproductive results.”

The CPR Award wasn’t the first for Strother and his paper. Last June, the article won Harvard Law School’s Roger Fisher and Frank E.A. Sander Prize, which was established in 2007 to recognize achievement for the best student paper on negotiation, dispute systems design, mediation, or an ADR topic.

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DuPont’s Burt also presented the award for Outstanding Book, noting that the winner “could hardly be more timely.” He presented the award to editors Mohamed S. Abdel Wahab, Ethan Katsh, and Daniel Rainey for “Online Dispute Resolution: Theory and Practice” (The Netherlands: Eleven International Publishing (2012)). The book, a compendium of contributions on the latest in ADR technology, is available at www.ombuds.org/odrbook/Table_of_Contents.htm.

“It has an all-star team of legal scholars that contributed to it,” said Burt, adding, “It will be the go-to book on the … area.”

Chapter contributor Colin Rule, who is CEO of modria.com, an online dispute resolution provider, accepted the award on behalf of the book publishers and editors. [The CPR Institute, which publishes this newsletter, and modria.com are working together on developing ODR platforms that can address streams for private matters; see CPR’s website at www.cpradr.org for updates.]

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CPR board member Thomas Sabatino Jr., who is executive vice president and general counsel for Walgreen Co., based in Deerfield, Ill., presented the final award of the evening at the San Diego dinner, for Outstanding Electronic Media. The award, which goes to a company, group, or individual that has produced exceptional electronic media on ADR, was presented to Just Court ADR (see http://blog.aboutrsi.org), a blog that provides up-to-the minute information on developments in court conflict resolution programs. The award was accepted by Susan M. Yates, executive director of Resolution Systems Institute (see www.aboutrsi.org/staff.php?ID=3), which assists courts in improving the quality of their ADR services in its home state of Illinois, as well as nationally through the website and blog.

CPR MEMBER-GET-A-MEMBER PROFILE: FEINBERG ROZEN

Washington, D.C., law firm Feinberg Rozen LLC is one of three organizations that have led CPR’s 2012-2013 Member-Get-A-Member Campaign.

Kenneth R. Feinberg

The firm is headed by name partner and national conflict resolution expert Kenneth R. Feinberg, who has been a participant in CPR Institute activities since the 1980s. Feinberg is best known as the special master for the Sept. 11 Victim Compensation Fund, in which Congress authorized payments to pay those injured and the families of people who died in the 2011 terrorist attacks.

The CPR Member-Get-A-Member Campaign spreads the word about commercial conflict resolution via organizations committed to improving the practice—that is, those that already participate in CPR initiatives. For the campaign, CPR members disseminate information to companies and vendors about the CPR Institute’s alternative dispute resolution initiatives, as well as membership offerings. CPR also assists members on approaches to nonmembers, as well as acts on information provided by members about organizations that might be receptive to a membership invitation.

Feinberg, the author most recently of “Who Gets What: Fair Compensation after Tragedy and Financial Upheaval,” published last year by PublicAffairs, has a long history of administering claims resolution facilities in high-profile affairs. In the 1980s, he worked on Agent Orange herbicide cases to settle extensive litigation between injured Vietnam War veterans and chemical companies. He did similar work in the Dalkon Shield cases, compensating injured users of a defective contraceptive device.

More recently in 2009, he was appointed by the Obama administration to temporarily oversee executive pay at seven big companies receiving bailouts under the $700 billion Troubled Asset Relief Program.

Feinberg’s biggest current matter involves claims made against BP for the 2011 drilling platform explosion and discharge into the Gulf of Mexico. The British oil giant posted $20 billion to fund the Gulf Coast Claims Facility. He oversaw a process in which Feinberg Rozen hired more than 4,500 professionals, “including claims processing firms, accounting firms, investigators, catastrophe response companies, economists, academics and other professionals … to assist it in the development and implementation of claims processing protocols and methodologies,” according to a report on the facility commissioned by the U.S. Justice Department.

The facility formally closed last year after paying about $6.2 billion to 220,000 claimants, and continues payments in a transition process to a successor, court-supervised facility which opened last year, and on which Feinberg Rozen continues to work.

Over the past year, Feinberg and his firm have administered smaller matters that have garnered significant media coverage and public interest:

• He is acting as a mediator in the civil lawsuits—28 at press time—that sprung out of the Jerry Sandusky child abuse cases at Penn State University.
• He was tapped to administer compensation in a the $77 million fund to compensate the injured or those who lost family at the September 2011, Reno, Nev., National Championship Air Races, where 11 people died and about 70 people were injured in a crash, according the Associated Press.
• He is overseeing claims facilities for an insurance company related to business insurance claims in the wake of superstorm Sandy. [The CPR Institute assisted Feinberg with neutrals’ recruitment; details can be found on CPR’s website, here: http://bit.ly/13RDkW5.]

Feinberg has participated in many CPR events as a panelist and speaker. In CPR’s 2009 Annual Awards for Excellence in ADR, Feinberg received a James F. Henry Award, named after the organization’s founder, for outstanding achievement in the conflict resolution field.

Feinberg also has just begun another effort to boost awareness about the CPR Institute. At press time in late March, he initated a three-part, invitation-only Master Breakfast Series on Mediation, which was to continue into April. The program, “Mediation: Should I Mediate? When? How?” is directed to corporate counsel, and is being held in the New York office of Kaye Scholer. Feinberg is a former partner at the firm. Slots for the April sessions may still be available; check the home page at www.cpradr.org or call +1.212.949.6490.

Feinberg is co-chair of the CPR Commission on Facilities for the Resolution of Mass Claims, which two years ago released the CPR Master Guide to Mass Claims Resolution Facilities. The book discusses sophisticated ADR use in a variety of mass claims situations. It recommends best practices for different types of claims, including mass torts, disasters, defective products causing only property damage, and even Sept. 11-type tragedies. It provides a roadmap for determining who is entitled to receive money and guidelines for implementing the distributions.

Feinberg and his firm recruited Houston-based Susman Godfrey LLP to be a CPR Institute member. Susman Godfrey is a 32-year-old litigation boutique, which has five U.S. offices and nearly 100 attorneys. Last month, the new CPR Institute member featured on its website (see http://bit.ly/Wi7SvG) a Finra arbitration the firm’s attorneys had won on behalf of two former Morgan Stanley brokers. The Feb. 21 decision ordered the investment bank to pay $1.5 million in unpaid commissions to the brokers, according to the law firm.

In future issues, Alternatives will profile the other organizations that participated in the CPR Member-Get-A-Member campaign. Participating organizations such as Feinberg Rozen receive discounts on CPR Annual Meeting registration fees, as well as recognition on CPR’s website, in its annual report, and at the meeting itself.

For assistance with spreading the word about the CPR Institute, see this CPR website page: http://www.cpradr.org/
About/Membership/MemberGetAMember.aspx. For general membership information, contact CPR Institute Membership Director Terri Bartlett at tbartlett@cpradr.org or +1.212.754.4261.

Litigators over- and under-think the humble mediation brief. They provide their diligent mediator with a lengthy summary judgment motion, exhibits included, slapping on a new caption page titled “Confidential Mediation Brief,” or they submit a three-page recitation of the most elemental facts.

In either case, the attorneys end with a promise that they will negotiate in good faith despite how worthless and frivolous the opponent’s case happens to be. They vow either (a) to magnanimously waive costs in exchange for a dismissal, or (b) to accept full damages—but discount punitives—as the case may be.

Gee, thanks.

Neither is really helpful to the mediator … and hence neither helps the client fully use the power of the mediation process.

What we need instead is a rethink.

The first place to start is with a simple question: What is the real purpose of the mediation brief?

WHY USE A MEDIATION BRIEF?

Trial lawyers too often see the mediation brief as an opportunity to persuade. They like to focus on the legal claims, which is not surprising considering they are representing their clients in a court of law and they spent all that time in law school learning the law … or at least where the law is stored. (In the good old days, it was stored in books.)

These lawyers see mediation as another court process, only with nicer neutrals, a friendlier staff … and food. Hence, the purpose of a mediation brief for these trial warriors is to convince the mediator, like the judge, that trial victory is inevitable. It’s the philosophy of the late Al Davis: Just win, baby!

But of course mediation is not a win/ lose process, and the mediator is not a judge. The neutral makes no substantive decisions. So providing the mediator with an advocacy piece designed to convince him or her that the case is strong and has no holes accomplishes … what, exactly?

Others use the mediation brief to inform. They take the word “brief” literally, filing three-page high-level recitations of the facts, combined with short summaries of the basic legal principles—concluding, of course, with the obligatory “We are here in good faith.”

But if this is all a brief needs to accomplish, why bother writing anything at all? Just give the mediator a call! A personal phone call—which frankly should be de rigueur at this point in the evolution of legal mediation— certainly will provide both the attorney and the mediator with a bonding moment, while allowing the attorney to inform the mediator (and maybe even persuade the mediator on appropriate matters).

Though while persuasion and information may be fine ingredients of a modern mediation brief, they don’t go far enough.

To really rethink the mediation brief, we need to remind ourselves what the parties and neutral are trying to accomplish in mediation. In litigated or pre-litigated disputes, the parties are already on one path to resolution. It’s a predictable path filled with depositions, written discovery, discovery disputes, summary judgments and other dispositive or limiting motions, experts, costs, fees, juries, judges, and appeals—not to mention the stress, pressure, and interference with everyday work and life.

It’s not the prettiest forward-looking path, but at least it is a future that will—eventually—result in a final resolution. With a little help, the parties can usually understand and appreciate what that future will be like, and what it will cost.

In mediation, the participants are trying to create a path to an alternative future that looks better to the parties than the path they are currently on. They are looking to identify impediments on that new path, craft detours around them, and generally work together—yes, even a distributive negotiation is a process the parties do together—to see if they can invent a new future that they each like better.

The mediator is right there in the middle of this exploration. He or she helps the parties to investigate and analyze their options, and then to compare those options to the less-than-cuddly future they currently face—the classic “Batna” (“best alternative to a negotiated agreement”) analysis.

So shouldn’t the mediation brief be designed to help the mediator help the parties in this quest for a better future? Shouldn’t it provide the mediator with the information and tools he or she needs to help the parties identify and explore meaningful alternatives, recognize and overcome obstacles, and appreciate the Batna?

In other words, rather than focus on the law or the facts or the legal arguments, the mediation brief should instead be aimed at helping the mediator help the clients obtain the best settlement—or at least the best settlement proposal— possible through the mediation process.

In short, the mediation brief should help the neutral do his or her thing.

WHAT THE MEDIATOR NEEDS

Which begs the question: What does the mediator need to do his or her thing?

Really, only two things. First, the mediator needs to understand “the problem.” Second, he or she needs to appreciate “the solution.” Simple.

THE SEARCH FOR THE PROBLEM: Let’s start with the problem. Contrary to the trial lawyer’s instinct, the problem is not the legal case that will ultimately be tried to the judge or jury. Rather, for mediation purposes, the problem is whatever it is that is keeping these two parties from finding a resolution to that legal case.

Stated another way, every dispute is, as a matter of definition, at an impasse. If there is no impasse, nothing is stopping the parties from settling the case and heading to the local pub to celebrate. Find the impasse, and you are on your way to crafting a resolution.

This search for the cause of the impasse— the driver of the dispute—is the ultimate treasure hunt for your diligent mediator. If the neutral can find what is really preventing the parties from coming together, he or she can then move to step two: Helping the parties around it.

Try this analogy on for size:

Q: How do you stop a baby from crying? Feed it? Burp it? Rock it? Distract it? Give it medicine? Change its diapers?

A: It depends. What is the cause of the tears? Is he hungry, tired, bored, sick … or stinky? Once you figure out the cause of the tears, the solution is easy. (Unless like the author your solution is the same no matter what: “Here you go, dear.”)

The clients want the tears to stop. The mediator is (a) trying to figure out the cause of the tears, in order to (b) help the clients find a meaningful solution.

A mediation brief that simply says the baby is crying is a step in the right direction … but a better brief would note that the baby hasn’t been fed in a while.

Take a trade dress matter as a better example. Sure, the lawsuit is filed because the owner of the distinctively shaped and colored scalp massager thinks his competitor’s scalp massager is just a tad too … identical.

But why hasn’t the dispute settled? The similarity of the product may or may not have been the genesis of the dispute, but what is the obstacle that is preventing the dispute from resolving now ?

There could be any number of obstacles. Identifying them is the first step in approaching mediation, and will guide the brief-drafting. (This same analysis affects mediator selection, as explained in “Rethinking Mediation: A New and Better Path to Mediator Selection,” 30 Alternatives 105 (May 2012).)

For instance, the article notes that the driver of this dispute—once again, the cause of the impasse—could be financial (“I only sold one scalp massager … to my mother. We have no money”); emotional (“the competitor is my former trusted partner who stole my idea; I hate him and now he has to pay!”); attorney ego (“I’m better than my opposing counsel … and I’m going to prove it”); client inattention (“the adjuster with authority is on vacation … again”); business realities (“my cash flow is sea-sonal—and this ain’t the season”); informational (“they claim they have evidence of customer confusion, but we haven’t seen it”); legal (“they misunderstand the standard for trade dress.”); you or your firm (“I need trial experience”; “I’ve been too busy to focus on this case”); unrealistic client expectations (“I deserve $1 billion for their blatant copying of my beautifully distinctive head tingler”), or the opposing attorney or client (“He needs to bill this case a little longer”).

So to get back to the question, what does the mediator need in order to understand the problem? He needs to find this driver, this underlying cause of the impasse. Until he can help the parties figure out why the baby is crying, the search for a solution is simply futile.

PEELING BACK THE CURTAIN: The mediation brief should help the mediator in this quest. It should allow the mediator to peek behind the curtain. It should tell him or her what the relationship is like between opposing counsel.

What about the relationship between attorney and client on each side? Perhaps more telling, what is the relationship of the two parties? What did it used to be? Why is the plaintiff suing? Why is the defendant fighting as hard as it is? What is the plaintiff doing now, and how are his or her finances? What are the defendant’s finances? Is insurance involved? What is the carrier’s position?

The mediation brief should look at the drivers identified above and help the mediator figure out which, if any, apply. It should understand that the search for the cause of the impasse, the real driver of the dispute, is a team effort.

THE SEARCH FOR THE SOLUTION: Which leads to the second thing the mediator needs in order to help the parties find a preferable alternate future: the solution. Understanding that the baby is hungry is a great first step. We no longer need to consider medicine, diapers, toys, etc. All we have to figure out now is how to feed the ear-piercing little angel.

Or in the trade dress example, assume the defendant/alleged infringer was a former trusted junior partner who was forced out of the plaintiff ’s business after it appeared he was self-dealing, and he thereafter started up a competing scalp-massage company.

The driver of this dispute is not a disagreement on the law as much as it is emotional. Accordingly, the mediation doesn’t need to focus as much on the legal niceties of functionality or distinctiveness in order to find a solution. The parties need to find a way to conquer the emotional issues that are preventing a resolution.

How does a mediation brief help? By remembering the late Roger Fisher and his collaborator William Ury, who taught in Getting To Yes the importance of identifying underlying interests.

The brief should tell the mediator what is going on. What does the client want? What is she concerned about? What are her desires and needs? What does she think would be her ideal resolution—other than “$1 billion” or “dismissal with prejudice,” of course?

After all, the parties have the inside track in knowing what they want and need. Their counsel will have some good ideas as well. The brief should share those ideas with the mediator.

WHAT THIS ALL MEANS

Put this all together, and a good mediation brief for most legal disputes could be drafted in about seven pages. It would cover:

1) A short description of the case and the key legal and factual issues: This should not be long or detailed—certainly not a summary judgment rehash. It should be just enough to introduce the dispute and give the mediator an idea of what the client’s existing future path looks like, the path to trial.

2) The status of the litigation: Where in the litigation process is the case? What is the status of depositions and other discovery? What’s the summary judgment story? When is trial? Again, this helps the mediator and the client better understand what the client has in store for himself if the case doesn’t settle. It also helps the mediator identify whether there are any significant informational gaps that could inhibit a successful mediation process. After all, nothing stymies a mediation as much as the parties operating under a completely different understanding of the underlying facts.

3) A summary of settlement discussions to date, if any: Who said what and what was the response? Include each party’s last settlement position.

4) The roadblock to settlement: Now we get to the good stuff—the stuff that will lead to the development of possible alternate futures. Explain the cause of the current impasse, or the actual driver of the dispute. Address the questions set out in the “Peeling Back The Curtain” section above. Include something perhaps a little more introspective than “The current roadblock to settlement is the opposing attorney’s asinine legal theories and his client’s fantastical expectations”—though that could be a fine start.

5) Search for solutions: Describe dynamics that might be affecting a resolution. Are there any important views, beliefs, desires, or secret needs of the parties? What might a settlement look like? Granted, this might be the hardest to discern for the advocate, but it might also be the most valuable for the mediator and the client.

CONFIDENTIAL. OR NOT. OR BOTH.

A final note on rethinking the mediation brief: Who should see it? At the risk of sounding like a broken record: It depends on the brief ’s purpose and the cause of the impasse.

For instance, if part of the impasse is the opposition’s perceived failure to appreciate the strength of the legal case, then exchanging polite briefs that outline the case, provide some cites, and explain the damages analysis, can be extremely helpful.

Indeed, there is nothing wrong with using the mediation brief to educate the opposing party on these issues. Even if the impasse is the defendant’s lack of finances, this might be information that the defendant would want the plaintiff to have before the mediation. In these cases, the brief should be informative, non-inflammatory—and shared.

On the other hand, if the impasse (and hence a focus of the brief) is on how “difficult” the opposing party or attorney is, or what the client’s secret need is for resolving the case, or even how unrealistic the client herself is, then a confidential brief is a pretty good idea. After all, the goal of the brief is to assist the mediator, not inflame the opposing party.

And if it makes sense, counsel could write two briefs–one to be shared, and one with the good stuff. Items (1)–(3) above can probably be shared in most cases. Items (4) and (5), well, probably not.

* * *

The mediation brief is an opportunity to help the client find a future that the client likes better than the predictably tortuous current path. Helping the mediator identify (a) the underlying impasse cause, and (b) the elements affecting the search for a solution, will allow the client to best harness the power of mediation.

Providing the mediator with 150 pages of legal briefs, deposition testimony, declarations, emails, and other trial evidence may help too—particularly if the goal is to help the mediator get a good night’s sleep before the mediation session.

And if it sounds like much of this could be accomplished in a pre-mediation telephone call with the mediator, it can. Perhaps a future article in this series should consider how the telephone, and a mediator with time, will make the mediation brief obsolete.