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Hot Disputes Cool Down in Online Mediation

January 21, 2001
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Janet Rifkin has resolved numerousworkplace conflicts. As a former ombudsperson and current chair of legal studiesat the University of Massachusetts, Amherst, she has witnessed the rage andwrath of many disgruntled employees.

    In the past, she typically conductedface-to-face meetings, whereas now she champions online mediation to prevent,manage, and resolve workplace disputes. Not only is it cheaper than litigation,but it can also save time, energy - and face. Had she known about onlinemediation earlier, Rifkin says, she would have included Web-based technology(e-mail, Web sites, and chat rooms) to facilitate preliminary discussions withcore disputants, set ground rules for negotiations, and abate any anger.

   Upto 30 percent of a manager’s time is wasted in dealing with employeeconflicts, according to estimates by the Academy of Management Journal, ane-journal on the Internet. With the advent of online mediation services such asNewCourtCity.com and onlinemediators.com, employers and HR managers may haveadditional reasons to click a mouse: failed partnership agreements, labornegotiations, sexual harassment charges, customer problems with payments - evenemployee battles over parking spaces.

    “We’re at the beginning of a wholenew age,” says Rifkin, also co-director of the Center for InformationTechnology and Dispute Resolution, a Hewlett Foundation-funded project.“Within the next five years, we’re going to see an incredible explosion ofthis [type of service].” In some cases, online mediation can be used in lieuof face-to-face negotiations. If not, it can complement your current mediationpractices, regardless of the number, locations, and time zones of disputingparties. 

Meet today’s pathfinders
   In 1995, John R. Helie and Jim Melamed,co-directors of Eugene, Oregon-based Mediation Information & Resource Center(MIRC), developed Mediate.com to spread the gospel of mediation. Today, the Website contains more than 400 articles, hosts 1,500 visitors a day, and contains adatabase of more than 5,000 mediation service providers.

    Last June, the Federal Trade Commissionand the Department of Commerce sponsored a conference entitled “AlternativeDispute Resolution for Consumer Transactions in the Borderless OnlineMarketplace.” Although the specific focus of the conference was onlinebusiness-to-consumer transactions, conference participants - including Helie -also addressed the broader use of online dispute resolution.

    As the Internet continues to grow,conflict resolution will become not only an integral component of e-commerce(between buyers and sellers) but also a virtual means of solving traditionalworkplace disputes. Consider, for example, how two major convention centers inChicago and the Culinary Union used online mediation during their recentcontract negotiations.

    According to labor counsel Stuart R.Korshak, a partner in the San Francisco-based law firm Korshak, Kracoff, Kongand Sugano, the process was facilitated by TAGS™ (Technology Assisted GroupSolutions), a network of computers and customized software that federalmediators used to help solve their labor problems. Through a specially designedWeb site (http://www.tags.fmcs.gov/),both the convention center owners and union were able to view master proposals,the tentative agreements, each side’s notes, lists of open issues, and otheragreements for the purposes of comparison and to participate in a chat line.“The ability to have a neutral federal agency [Federal Mediation andConciliation Service] with computer and mediating expertise - that was offeredfor free - made the unions and members willing to accept and trust it,” saysKorshak.

    Employers also can use online mediationto avert today’s litigation crisis, says Kristina Eisenacher, founder ofNewCourtCity.com. The high cost and long delays associated with the trial ofcivil matters often make litigation an impractical method of resolving disputes.It’s not uncommon for the attorney fees, expert witness fees, jury fees, courtreporter fees, and other related costs to exceed the amount in dispute.“Parties increasingly find they’re spending more to litigate than the costto settle the matter,” says Eisenacher. Litigation, she adds, can cost as muchas 80 percent more than mediation. Litigation awards in workplace-violencecases, for example, can average up to $1 million, according to PalmSprings-based Workplace Violence Research Institute. 

How it works
   Although many online mediation servicesfocus primarily on e-commerce disputes (Clicknsettle.com and Squaretrade.com),NewCourtCity.com has created an online package that addresses every level ofemployment - from hiring, training, and education to termination. It recommendsthat employers and HR managers implement a three-step process:

  • Disputeprevention: All current and/or potential new employees are first asked tosign a release authorization for a background check. Upon successfullypassing a background check, employees are asked to sign a pre-disputemediation agreement. This document is an agreement between the company andthe employee to enter into mediation as a first step in the event of adispute before going to the labor board or courts. This step alone can savea company hundreds of thousands or even millions of dollars.


  • Dispute-managementtraining: Often, training just a few key employees and managers in the rightskills can create highly effective in-house conflict-resolution systems thatwill provide a safety net to catch, defuse, and manage disputes before theyescalate.


  • Onlinedispute-management center: Companies can use the NewCourtCity.com Web siteas an outlet for employee concerns, problems, and complaints. There are fourprogressive dispute-resolution options, from automated online techniques tomore formal options, such as contacting a mediator or an attorney.

    Other online mediation serviceproviders divide their process into five stages. Jeffrey Krivis, a LosAngeles-based attorney, follows the online strategy developed by Professor RandyLowry of Pepperdine Law School in Malibu, California. “When I get a callinquiring about online mediation, I first attempt to assess the temperature ofthe case,” says Krivis. “How hot is the dispute?” He’s interested inknowing not only the facts of the case and the status of negotiations, if any,but also why the parties think mediation might be useful. Once he gathers theinformation, which comes together in the first phone call with the attorneys, hethen follows this pattern:

  • Conveningthe mediation
  • Openingsession
  • Communication
  • Thenegotiation
  • Closure

    Within each stage there is a task - theobjective - that  the mediator istrying to accomplish; an action, which is how themediator is going to accomplish the objective; and a result, the outcome thatthe mediator expects to achieve. Once the parties have gone through all fivestages of the mediation, the goal is to achieve a final and durable settlementof the dispute.

    As for confidentiality, the MediationInformation & Resource Center has posted a sample agreement on its Web site(http://www.to-agree.com/abaconf.htm).It addresses the operating dos and don’ts for disputants and the assignedmediator. But since e-mails can be resurrected and subpoenaed in court,participants should assume that nothing is completely private online, warns KenCloke, director of the Center for Dispute Resolution in Santa Monica. 

The advantages and disadvantages
   Online mediation allows disputingparties to move out of real-time discussion to asynchrony, says Geoff Sharp, anAustralian attorney who prepared a conference workshop last July entitled“Mediators in Space.” Face-to-face meetings often result in single-daysessions with all participants and lawyers present. But quite often, thedifficulties of scheduling, cost, and “battle mentality” result in acrisis-like environment.

    On the other hand, online mediationallows an evolving process that moves beyond crisis meetings and lets theparticipants engage in a reflective discussion at their convenience. Supportersof online mediation also see advantages in the parties’ being able to formtheir thoughts slowly. Participants often welcome the opportunity to expressthemselves without having to compete for airtime and hearing their own voices.

    And last, “You also have a completerecord of the mediation,” says Sharp.

    One of the disadvantages, he adds, isthe absence of any opportunity for the mediator to read the parties’ emotionalcues. Also, how can one be sure that people are who they say they are?

    Online mediation providers, however,have instituted some forms of establishing identity, says Colin Rule, CEO ofOnline Resolution. “We include passwords and ask for credit cards,” he says.Some partners also send small random-amount deposits to bank accounts and thenask the parties to verify the amounts. “That’s an innovative approach. Butreally, without videoconferencing, it’s impossible to be sure who you’respeaking with online.” By building a secure password-protected system,however, one can get about 95 percent assurance that you’re speaking with theright person, Rule says. 

How much does online mediation cost?
   Online mediation fees pale incomparison to lawyers’ fees. Court costs can add up to thousands of dollars,whereas online settlements may cost individuals only a few hundred dollars.

    According to Rule, consumer mediationswith values of less than $500 frequently involve a one-time case fee. The fee -charged to the filer - is between $15 and $25. For mediation of higher-valuedisputes, there’s an hourly rate charged to each side. “It tiers up based onthe value under dispute,” says Rule. It usually goes from $50 per party perhour to $150 per party per hour. Most disputes, he adds, can be resolved in twohours or less. So the net cost for the lowest tier is $100.

    That’s cheap compared to a day incourt. There will, of course, always be a need for traditional forms of disputeresolution. Yet even the most traditional face-to-face practitioners - includingHR managers - will find that the Internet is going to be a growing part of theirmediation tool kit. Says Eisenacher: “Any case that can be arbitrated orlitigated can be mediated.”

Workforce, January 2001, Vol80, No 1, pp. 48-53  SubscribeNow!


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