Page 7 - Alternative Dispute Resolution

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Alternative Dispute Resolution | MONDAY, NOVEMBER 16, 2015 | S7
are uniquely suited to be resolved through mediation. Given the confidentiality of media- tion, it is an excellent resource that ensures that “trade secrets” and “confidential infor- mation” will remain outside the public view. Mediation is private and confidential. There are no court filings. There is no need for affi- davits, briefs, and exhibits that may air “dirty laundry” or expose valuable information to the scrutiny of competitors. There’s no worry that a competitor may learn of the dispute, sit in the back of the courtroom or read a court file. Parties do not need to worry that a sealing order will not be granted, or that a court decision itself will reveal confidential, sensitive or proprietary information about the parties and how they conduct their busi- ness (in expounding why information is or isn’t a trade secret). Not only is the mediation itself confidential and private, but everything that is said at the mediation is confidential and cannot be used in later proceedings. (This does not mean that the information cannot be learned during discovery; rather, the statements themselves are privileged and inadmissible.)
Because a mediator does not decide any- thing, the mediator can have ex parte commu- nications with counsel representing one side and these private communications can help reach a resolution as the parties’ common interests can be discerned. It is the common ground that will form the basis for the settle- ment. These “caucus” sessions are invalu- able because it provides a private forum for
Settlements of cases involving theft or misuse of “trade secrets” or confidential information usually will focus on how to ensure that the pilfered material is returned and not retained by the former employee (and possibly his new employer).
prohibited, the geographic scope and length of the restriction, whether in a new covenant or a modification of the existing restriction. A mediated resolution can limit what customers the defendant will not sell to or how profits from certain accounts might be split. In this way, the parties are not contesting in court whether the customer list actually is a trade secret. Instead, the plaintiff can target the specific accounts that it believes truly need protection for a specific period of time.
In the age of ESI, mediation can be an important asset, as it can address how to determine the extent to which ESI was taken and to whom it was given. A settlement agree- ment can include a forensic examination of computers to ascertain what information was taken by the former employee and to whom it may have been sent or how it was used. An ESI expert can also ensure that material has been deleted, and the former employee may be required to provide an affidavit that sets forth what was taken and how it was used or to whom it was given. If it turns out that this information provided to the plaintiff is untrue or incomplete, then a claim could lie for breach of the settlement agreement.
Mediation can also address damages. For example, a settlement could address liqui- dated damages for a breach of the settlement, or a payment that compensates plaintiff for legal or expert fees—even in the absence of an attorney fee clause.
The success rate for mediations of this type of dispute is increased » Page S11
a party to vent. Also, it enables the advocate to explore the strengths and weaknesses of a claim or defense (including problems with proof) and the cost of litigating the issues outside of the courtroom and with a neutral who has no stake in the outcome. This can also help in two ways. First, lawyers often “fall in love” with their cases and do not see the problems of proof or the obstacles presented by negative case law, and often clients are over-sold the likelihood of success. Second, some clients refuse to hear that the path to the conclusion of the case can be long, costly, and uncertain. Using a neutral to review these matters is an excellent way to “kick the tires” of a case and then jump to the end-game. A neutral may ask parties and counsel going through an analysis of the cost of litigation.
In addition, the nature of mediation gives parties control over the outcome. No deci- sion is imposed by a judge or arbitrator (or the mediator). Rather, the business people can identify and protect their true interests and fashion a result that they can live with and exercise their business judgment. For example, it is your client who knows which
customers or accounts or lines of busi- ness need protection and how that can be achieved. A company representative may know how long the protection is needed (which may be shorter than the length of the existing contractual restrictive covenant.) There is therefore no worry that a judge may have a vastly different view of those interests or how such should be protected, or that they do not qualify for any protection at all. Thus, by having control over the outcome, the parties can resolve matters in a way that furthers their actual interests—without risk- ing an unfavorable decision.
Available judicial remedies are limited to damages and equitable relief. On some occa- sions, a court may “blue-pencil” an agree- ment to shorten, for example, the length of the restrictive covenant or to reduce its geographic area. To obtain equitable relief, a party must show that legal damages will not adequately compensate the plaintiff. In a mediation, however, no such showing need be made. Rather, the parties can negotiate the scope of a consent injunction or a new agreement that sets forth what conduct is
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