MDHR Mediation — A Cautionary Tale

I am a strong advocate for mediation as a form of alternative dispute resolution (“ADR”). However, a recent Minnesota Department of Human Rights (“MDHR”) case should cause anyone with charges pending before that agency to think twice before participating in MDHR mediation. For the uninitiated, mediation is an ADR process where someone trained as a neutral (usually an attorney) is hired to meet with the parties and facilitate a discussion which, in the majority of cases, results in settlement of the dispute. It is a highly effective form of ADR. When employment discrimination charges are filed with MDHR, the agency will often offer to mediate the dispute. Parties who agree to MDHR mediation hope for the same outcomes to be achieved as in private mediation; that is, saving the expense and delay of litigation, fashioning their own relief, maintaining a level of confidentiality, and avoiding the risk of a judge or jury publicly deciding their fate. An additional benefit of MDHR mediation is that the agency provides the mediator at no cost to the parties, whereas the parties typically share the cost of a privately retained mediator. One recent MDHR case highlights the potential for unintended consequences of MDHR mediation. The case involved discrimination charges filed against Alexandria Light and Power (“ALP”) by an employee who had resigned. The case was settled through MDHR mediation with an agreement for the claimant to paid $65,000.00 by ALP’s insurer and with no admission of liability or findings of wrongdoing by ALP. This part of the process seemed to accomplish the parties’ goals of saving costs and minimizing risk. However, after the settlement was reached, MDHR publicized the outcome with a press release that was posted on its website and then re-distributed by local and statewide media. The problem with the MDHR press release was that it did not accurately describe the case or the settlement. Consequently, ALP issued its own statement to correct the misinformation. Because ALP is a municipally owned utility, state law required that the settlement be public information; therefore, the parties did not expect the settlement to remain confidential. However, having the settlement inaccurately described in an MDHR press release was an unexpected twist. Thus, parties facing MDHR charges should bear in mind the possibility of the agency publicizing the outcome of a settlement. To minimize that risk, consider using a private mediator, include confidentiality clauses (to the extent allowed by law), and if utilizing MDHR mediation, discuss beforehand with the agency any publicity limits that may be imposed. For more information about this article, please contact me at [email protected].