Wage and hour claims—whether brought on their own or as part of a larger lawsuit involving claims of discrimination, retaliation or harassment—provide unique opportunities for settlement. Compared to the potential liability in harassment and/or illegal termination claims, wage and hour exposure can be calculated more precisely for the purposes of settlement discussion resulting in the parties not being as far apart in their determination of reasonable settlement value. After personally settling countless wage and hour cases as legal counsel for both employee and employer clients for more than 21 years and now as a mediator, the following are my recommendations on how to have a more productive mediation in a case involving wage and hour claims:
For Plaintiff’s Attorneys:
1. The Numbers Count So Count the Numbers. Integral to reaching a settlement is putting in the effort to create a detailed, accurate, and thorough accounting of Plaintiff’s damages, penalties, and interest. Math is precise so use it to your advantage. If it is very time prohibitive to accurately calculate damages for the entire statute of limitations period—for example, a case where non-discretionary bonuses were paid every pay period but not factored into the regular rate of pay for the purposes of determining overtime wages over four years—then at a minimum, perform an accurate calculation based on a representative period of time that can be extrapolated on a pro rata basis over the entire employment period, if appropriate. This is more effective than coming into a mediation with an estimate that was obtained by eyeballing what Plaintiff’s counsel believes could be recovered without being able to show the defense how those numbers were determined.
2. Get The Documents You Need. Mediation can be successful at all stages of a case, including prelitigation. However, it is critical that you do what it takes at whatever stage you choose for mediation to maximize your chances of success. If you are mediating a wage and hour case very early in the process, it is important to have enough documentation to present an accurate damages assessment. That documentation may be obtained through formal discovery responses or through an informal agreement with opposing counsel to provide you with the documents you need to prepare your damages analysis. Have enough documentation going into a mediation to be able to demonstrate to Defendant that there is substantial risk if they do not settle.
3. Share Your Work. Share your detailed damages analysis with the defense at least a week in advance of the mediation so that they can take your calculations into account in discussing settlement authority with their clients. Although there will often be disagreements between the two sides about the hours your client claims they worked or the number of breaks they claimed they missed, you do not want mistakes made in calculating the damages, such as the hourly rate Plaintiff earned during a certain time period or the days on which Plaintiff actually worked, which can be verified via personnel records, to derail your chances at settlement. It’s better to learn at the mediation that you used the wrong hourly rate or that the Plaintiff actually worked 112 weeks rather than 190 weeks as you had calculated because you shared your calculation with the defense rather than have a settlement fail due to a misunderstanding over what should be undisputed facts underlying both sides’ damages calculations.
4. Include a Damages Chart in Your Brief. Your exposure spreadsheet should be included as an exhibit to your brief. Within the body of brief, prepare a chart where you itemize on a separate line each item of the damages, penalties and interest the Plaintiff is seeking to recover and add up these items to set out a total at the bottom of the chart. This is a user-friendly way for the defense and mediator to see what Plaintiff is claiming as their best-case recovery scenario.
5. Do Not Exaggerate. Make logical determinations on the underlying assumptions you will use for your calculations where they could impact your client’s credibility. If you are litigating an off the clock claim that results in substantial damages, consider whether claiming that your client never had an opportunity to take even one rest break throughout their entire employment may hurt rather than help your case which depends on establishing that your client is credible where that credibility is essential to proving the off the clock damages. By showing that you made careful and conservative considerations in setting out the violations you are claiming occurred, you will give the defense less reason to dismiss your client outright as dishonest and not believable, which would impede reaching a settlement.
6. Research and Cite Applicable Law on Unclear Issues. If you are claiming that your client is owed substantial unpaid overtime because they were misclassified, and you know that the defendant will be relying on one or more exemptions to oppose your claim, research and cite favorable, analogous cases in your brief to support your position that your client’s job duties did not qualify them for any exemption.
For Defense Attorneys:
1. Analyze Plaintiff’s Calculations. Take the time to determine if Plaintiff’s underlying assumptions may be mistaken—i.e. the hourly rate alleged for certain time periods or the claimed days worked based on the applicable personnel records for the employee. For example, determine if Plaintiff’s damages assessment is not accurate because Plaintiff took 18 weeks off during the applicable time period but Plaintiff’s calculations do not take this into account.
2. Investigate. Determine in advance of the mediation what witnesses or documentary or surveillance evidence may exist that will contradict the Plaintiff’s claims that they worked unpaid overtime, off the clock hours and/or did not have opportunities to take their breaks because of work demands etc. Determine whether to obtain declarations that would be persuasive at the mediation.
3. Cite Relevant Law. When arguing that Plaintiff was exempt, research and cite cases in your mediation brief where the court found that an employee in the same/similar position as that held by the Plaintiff was exempt.
4. Take All Potential Recovery Into Consideration to Determine Settlement Value. If Plaintiff failed to calculate liquidated damages and/or interest in their damages assessment for the mediation, and this would likely be awarded if Plaintiff prevailed at trial, take this potential exposure into consideration so that you are not undervaluing Plaintiff’s case when discussing what is a reasonable settlement offer with your client.
5. Determine Potential Attorney’s Fees Exposure. Where Plaintiff is very likely to prevail on one or more of their claims—for example, where an employee was indisputably owed commissions for a few final sales but the employer failed to pay them on or shortly after the termination date—you must factor in your determination of reasonable settlement value what attorney’s fees the Plaintiff may recover if you did not previously make a Section 998 Offer (Offer to Compromise), exclusive of attorney’s fees, large enough to cover the potential wage and hour exposure in the case since attorney’s fees are recoverable by statute by a prevailing plaintiff.
Polina Bernstein is a seasoned employment attorney and mediator who loves math, speaking and learning multiple languages, learning about other cultures and trying to find peace in a chaotic world. As an immigrant to the United States from Ukraine, Polina developed a strong work ethic and persistence to become the first person in her family to graduate from college and eventually go on to a successful career in the law. If you are looking for someone tenacious, experienced and compassionate to resolve an employment law dispute, please visit: www.bernsteinmediation.com and email [email protected] to find out about scheduling a mediation.