9 Toxic Workplace Behaviors (and What to Do About Them)

Toxic behavior can occur within businesses of any size or type. Are any of these nine toxic behaviors common within your workplace?

You may be thinking that because I run a small business, my employees and my workplace culture are all positive. I want you to know that even small businesses or family-owned businesses can be centers of toxic behaviors.

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    It’s important to understand what constitutes toxic behaviors in the workplace and how it can affect your business. Toxic behavior is generally defined as any behavior that negatively impacts others. It can include a workplace that is marked by significant drama and infighting, where personal battles often harm productivity. These behaviors can be exhibited by employees or, in some cases, by management. And no matter who is involved, they can disrupt a business significantly.

    The following are examples of toxic behaviors that could happen within any business:

    Toxic Behavior No. 1: Aggressiveness. This can affect workplace safety as well as productivity.

    Toxic Behavior No. 2: Narcissism. A positive culture includes a balance of give and take, and narcissism or too much self-focus can negatively affect this.

    Toxic Behavior No. 3: Lack of credibility. Mistrust and lack of credibility occur when people don’t follow through with promises, etc.

    Toxic Behavior No. 4: Passivity. Too much passivity can negatively affect productivity.

    Toxic Behavior No. 5: Disorganization. All organizations need focus, discipline and, most of

    all, strong structure.

    Toxic Behavior No. 6: Lack of adaptation. It’s important to have a company culture that can adapt to change.

    Toxic Behavior No. 7: Gossip. Office gossip can cause unwanted conflict and can undermine working relationships and negatively affect team work.

    Toxic Behavior No. 8: Glory seekers. Morale can be seriously affected by workers who claim credit for someone else's achievements, especially when seeking all the glory for a team project or downplaying the efforts of others in order to better highlight their own contribution.

    Toxic Behavior No. 9: Intimidation or bullying. Intimidation or bullying of any kind seriously affects company morale and can lead to legal actions taken against a company that allows this type of behavior.

    There are steps that a business can take to avoid and deal with toxic behaviors.

    Step 1. Look for signs of toxic behavior when conducting initial interviews.

    Step 2. Always check references and train your managers to spot signs of toxic behavior and how to deal with it.

    Step 3. Set up a way for employees to report toxic behaviors that protects them from retaliation. This can mean an anonymous reporting system or other procedure where they are protected.

    Step 4. Make sure all employee behaviors and actions are included in their performance measurements or reviews.

    Step 5. Try to detect any issues as soon as possible. This allows you to offer education or training if necessary.

    Step 6. If all else fails, you may have to terminate the employee for their toxic behavior. Be sure your employee manual includes these behaviors as unacceptable and that they can be used as grounds for termination. Document all incidents and any talks or other forms of communication with the employee prior to any termination or suspension for their behaviors.

    President, SACS Consulting & Investigative Services, Speaker, Trainer, Corporate Security ExpertTimothy A. Dimoff, CPP, president of SACS Consulting & Investigative Services, Inc., is a speaker, trainer and author and a leading authority in high-risk workplace and human resource security and crime issues. He is a Certified Protection Professional; a certified legal expert in corporate security procedures and training; a member of the Ohio and International Narcotic Associations; the Ohio and National Societies for Human Resource Managers; and the American Society for Industrial Security. He holds a B.S. in Sociology, with an emphasis in criminology, from Dennison University. Contact him at info@sacsconsulting.com

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    Next up: A 5 Step Plan to Implementing Safety Inspections
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  • A 5 Step Plan to Implementing Safety Inspections

    Ensuring a safe workplace should be the goal of every business. Performing regular inspections of both the workplace environment and the business’ equipment is crucial in creating a workplace that is a safe place for employees. So how do you go about performing a worksite analysis that will address all of the potential danger areas of which you should be aware? Here’s a five-point plan courtesy of the Occupational Safety & Health Administration that will get you started in the right direction:

    Ensuring a safe workplace should be the goal of every business. Performing regular inspections of both the workplace environment and the business’ equipment is crucial in creating a workplace that is a safe place for employees.

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    So how do you go about performing a worksite analysis that will address all of the potential danger areas of which you should be aware? Here’s a five-point plan courtesy of the Occupational Safety & Health Administration that will get you started in the right direction:

    1. Request consultation

    It’s never a bad idea to get input from the experts. OSHA offers a Consultation Program that provides comprehensive coverage of all of the dangers that might lurk at your business. Small business owners might also consider hiring an expert private consultant, too.

    2. Employee reviews

    From time to time, review with each employee their jobs. Break their duties down step by step to see what invisible hazards might exist in their normal day to day.

    3. Self-inspections

    In addition to consulting with outside sources, take time to self-inspect. Some things to keep in mind during these self-inspections include:

    • Ensuring fire safety standards are being met (i.e., fire alarm system is tested annually, there are enough fire extinguishers and they are readily available, etc.)
    • Are employees wearing safety equipment, such as goggles or shields, where appropriate?
    • Aisles and walkways are clear of obstructions
    • Floor openings are protected on all sides by covers, guard rails, etc.
    • Worn equipment and tools are being replaced as needed

    4. Analyze

    Look through the past several years’ worth of injury reports. Do you see a pattern emerging? That might indicate red flags that need to be addressed.

    5. Self-policing

    It’s one thing to set up formal workplace safety procedures. It’s another to follow through and ensure they are being carried out effectively. Small businesses must ensure all employees are aware of the business’ workplace safety policy and the ramifications of not adhering to it. It’s also important that your staff feels comfortable telling management when they see something that violates the company’s safety protocol.

    Of course, the tips listed above just represent a starting point when it comes to workplace safety. For a more detailed look at what you can do to make sure your business is as safe as possible, check out OSHA’s Small Business Handbook, located here

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    Next up: A Millennial and Baby Boomer Talk Out their Differences
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  • A Millennial and Baby Boomer Talk Out their Differences

    In my work here at the Greater Cleveland Partnership and COSE, I am lucky to interact with many of our Northeast Ohio businesses each day. In doing so, there’s a common thread in the interactions had between Baby Boomers and their Millennial employees. While the following conversation is not one heard first-hand, it’s my best guess as to how a Baby Boomer and a Millennial employee would discuss the workplace dynamics between the two generations.

    In my work here at the Greater Cleveland Partnership and COSE, I am lucky to interact with many of our Northeast Ohio businesses each day. In doing so, there’s a common thread in the interactions had between Baby Boomers and their Millennial employees. While the following conversation is not one heard first-hand, it’s my best guess as to how a Baby Boomer and a Millennial employee would discuss the workplace dynamics between the two generations.

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    Baby Boomer Business Owner: Help! Millennials are taking over my office! They’re Snapchatting everywhere! What do I do?

    Millennial: First off, calm down.  Close out of Facebook and let’s talk. Yes, we Millennials are heavy users of social media but did you know a lot of us use it to develop business for OUR company. Do you know how many of our clients and prospects are on Twitter, Facebook, and yes, even Snapchat?

    Baby Boomer:   OK, OK.  But my problem with your generation extends beyond just social channels–I mean, look at what you’re wearing! You’re wearing jeans, boots, the sleeves of your shirt are rolled up.  I’ve dressed the same—PROFESSIONALLY—every day at this job for the past 35 years!

    Millennial: Again, calm down. I just got back from an appointment with one of our many manufacturing clients. If I walk into their facility in a suit and tie to take a tour and meet with their floor workers, I’d be laughed out of there. And tomorrow, I’ll be meeting with a law firm downtown and will be wearing a suit. See, the thing about us Millennials is we’re flexible and have no trouble adapting to any given situation and …  Wait … Did you say you’ve been working here for the past 35 years?

    Baby Boomer:  Yep! Do you not see yourself working here for the next 20 or 30 years?

    Millennial: Honestly, I don’t know where I’ll be in five years, let alone 20. Can we talk about ways I can grow and develop into a leadership role that allows me to be here until I’m 60 years old?

    Baby Boomer:  See, that’s another thing with you Millennials. You want the leadership role, but you’re not willing to put in the hard work needed to get there.  Are you all really that entitled and lazy?

    Millennial: Would you prefer I come in everyday without any ambition or drive?  Just guessing here but that might be why so many of my Millennial colleagues both here at OUR company and others are so disengaged. Disengagement is not laziness.

    Baby Boomer: So it’s an entitlement thing?  You all think you deserve a leadership position right away?

    Millennial:  Not at all. If we have lazy and entitled employees here, that’s a workplace culture problem–not a Millennial one. I don’t think there’s anything wrong in wanting to know how one can grow into a leadership position long-term at your company. Some would call that being proactive. You say I’m entitled; I say I’m hungry. I’m not demanding a promotion right now, but this is my career we’re talking about here. What I want to know is how I can earn the role I see myself in one day.

    Baby Boomer:  That’s fair. But how do we do that?

    Millennial: Can we find some time each week to sit down and chat?

    Baby Boomer: That’s the last thing I want, another Millennial gunning for my job and wanting to meet with me constantly so I can pat you on the back, hold your hand, and tell you you’re doing a great job. You know, not everyone should get a trophy!

    Millennial:  Hold on. Have you ever considered–as a Baby Boomer who has forgotten more about our industry than I might ever learn–that we Millennials might be that desperate for a mentor of some kind before you retire?

    If I’m lucky enough to be in your position one day, I’d be flattered if a younger employee wanted to pick my brain.  I can promise you it’s not a threat when I ask about your day-to-day work and seek your advice on things that pop up in mine. 

    Baby Boomer:  I guess I never thought about it like that. 

    Millennial:  I can guarantee you I do not speak for all Millennials with what we’re talking about today but it’s important to me that you know we’re not all alike and of one mindset. 

    Some of us are just as motivated, driven, inspired, and -- believe it or not – committed as you are now and were when you were our age.

    Business Owner:  Whew, well that makes me feel better. I’m glad we had this talk. 

    Millennial:  Me too, want to head to Happy Hour?

    Baby Boomer:  What’s that? (Just kidding!)

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    Next up: A New Option for Small Business Health Insurance
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  • A New Option for Small Business Health Insurance

    We are excited to announce the creation of a new option for small business owners to access health benefits for themselves, their employees and their families—The COSE Health and Wellness Trust—a self-insured, multiple employer welfare arrangement (MEWA) designed for companies with up to 50 employees participating in health benefits. In anticipation of the next wave of transition required by the Affordable Care Act, the COSE Health and Wellness Trust gives small business owners another option to meet the health benefit needs of their companies.

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    /p>

    We are excited to announce the creation of a new option for small business owners to access health benefits for themselves, their employees and their families—The COSE Health and Wellness Trust—a self-insured, multiple employer welfare arrangement (MEWA) designed for companies with up to 50 employees participating in health benefits.

    In anticipation of the next wave of transition required by the Affordable Care Act, the COSE Health and Wellness Trust gives small business owners another option to meet the health benefit needs of their companies.

    This self-insurance option is a lot like the option that unions and large companies have in the market today. Similarly, the COSE Health and Wellness Trust leverages the combined size of many small employers working together and balances the risk across the pool of companies.

    Unlike community-rated ACA plans, the plans available through the COSE Health and Wellness Trust recognize the unique preferred health risk of most small businesses.  The plans that will be offered have far fewer restrictions on the benefit structures that are available under the ACA. Many of the plan structures reflect the kind of benefit options that were common to small businesses before the ACA and that exist in their current grandfathered and transitional plans. Those transitional plans must be ended by January 1, 2018.

    And for the smallest of businesses, the COSE Health and Wellness Trust provides an option for group coverage for small businesses with no employees. Today, new small business owners with no employees can only access insurance through the individual market. Only grandfathered plans and transitional plans (that are slated to go away by January 1, 2018) exist as additional options here. The COSE Health and Wellness Trust will be a new option with plans available to these small business owners without employees to provide coverage for themselves and their families.

    The COSE Health and Wellness Trust will be an additional renewal option available to members of COSE and the Greater Cleveland Partnership with less than 50 eligible employees and we are currently providing quotes for coverage as soon as September 1st.  Getting a quote is easy for those enrolled in our insurance program. You can request rates for this option effective immediately. Those members not enrolled or small business owners that are not yet a member can also get a quote for coverage and then determine if the plans and membership make sense for them.

    A Little Background About How We Got Here…

    When the ACA became law in 2010 and was implemented in 2014, our focus was on finding the best option for each small business under the new law. For some of our members, ACA was the best option—either because the health status of their group benefited by the community rating feature of ACA or the subsidies available due to the income of the owner or their employees were of benefit.  For the vast majority of our members, however, the best option was to preserve the ability to stay on their current plan—either by allowing them to elect “grandfathered” status or enrolling them in a transitional or “grandmothered” plan to delay their move to ACA.

    Now, the next wave of ACA changes will require that as of January 1, 2018, all small businesses that want group insurance and that are not “grandfathered” must be in an ACA compliant plan. The law requires that the “grandmothered” transitional fully insured plans will be eliminated. The only way to stay on an old plan is if you were on it before the law was enacted in 2010 and you’ve done everything required to establish and maintain “grandfathered” status.  While some of those plans will still fit, they limit the ability to make any significant benefit changes. The shift to ACA compliant plans is going to result in rates that are more expensive for most companies and, for many, rate increases of 30 percent to 70 percent are likely.  The COSE Health and Wellness Trust is an option to access coverage outside of the requirements of ACA.

    The Solution

    The COSE Health and Wellness Trust leverages more than 40 years of experience within COSE providing small business benefit solutions and our long term relationship with Medical Mutual. We have selected Medical Mutual to continue to work with us to support several of the underlying actuarial and insurance functions of the COSE Health and Wellness Trust.  Medical Mutual’s long-term commitment to the small business community as a local, Northeast Ohio company that is significantly invested in the small business market distinguishes them as a part of this solution. We also have engaged actuaries, legal advisers and a variety of other resources to help structure and guide the COSE Health and Wellness Trust to ensure it is a solid, viable, long-term resource for our members.

    We are pleased to announce that after more than a year of work on developing this plan and a rigorous review, the Ohio Department of Insurance awarded our Certificate of Authority earlier this week.

    We are confident that the COSE Health and Wellness Trust will be a great option for the vast majority of our members. The licensed COSE team at Medical Mutual and more than 200 specially trained brokers are able to talk with small business owners about the fit of this option with their needs.  As with other self-funded arrangements, there are some additional responsibilities involved in utilizing this plan, but based on the way we have structured it, we think they will be manageable and make sense for a broad set of small business owners.

    To learn more about the COSE Health and Wellness Trust and to find out if it is a good solution for your benefit needs, contact the COSE Sales and Service team at Medical Mutual at (440) 878-5930 or talk with your broker. 

    And, if you like the plan you are on now, know that COSE will continue to offer a range of fully insured plans side-by-side with the COSE Health and Wellness Trust through Medical Mutual and we will continue to make our members’ grandfathered plans available.

    We hope you’ll take the time to evaluate the fit of the COSE Health and Wellness Trust with your own needs.  As the ACA continues to evolve, we have continued to update what we can do to help you adapt to it.   In every area of your business, since 1972, our goal has been to be here to help you grow and succeed.  We hope that once you take a look at the plans available in the COSE Health and Wellness Trust, you’ll agree these options give you one more tool to achieve your success.


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    Next up: A Silver Bullet for Hiring the Right People
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  • A Silver Bullet for Hiring the Right People

    Behavioral profiling can help you select the best candidates and lower your company’s turnover

    One of my New Year’s resolutions for 2017 is to systematize hiring the right people.  In my experience, hiring is always a major issue at companies from $1 million to $100 million in revenue.  The problem is we rarely have systems to help make it manageable, and since it’s one of the most important drivers of growth, owners and executives really can’t delegate it (not with good results anyways). So how can we take some of the pain out of the process?    

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    Don’t agree the hiring process at your company is painful? Let me ask you this: The last time you realized you had an interview with a new potential hire on your calendar the next day, how did you feel about it? Did you say, “I can’t wait to get up tomorrow and get to work so I can meet a new potential employee!” Or was it more like, “Crud, I have to burn two hours tomorrow doing an interview …  I wonder if I can move it or pawn it off on HR to handle without me.”

    The solution lies in using behavioral profiles to improve your process. These “tests” don’t tell you about people’s personalities, rather they are designed to help you understand how employees will behave at work. Are they going to be autonomous, outgoing, and detail oriented or conservative, introverted and slower paced? Depending on whether you’re hiring a salesperson or a bookkeeper, you’ll be looking for different profiles.

    The first question is which behavioral profile you should use. Truth be told, there are many to choose from, which can seem overwhelming. But don’t worry, I’ve done the research for you and will share with you my two favorites.

    Culture Index

    For hiring, my preferred behavioral profiling system is called Culture Index. My favorite part about this profile is you purchase a one-year license (it costs several thousand dollars a year) and you get unlimited access. With Culture Index, you can have as many candidates or employees take the profile as you want.

    The biggest mistake I see companies make with hiring is waiting to do behavioral profiles until too late in the process. Because behavioral profiles often cost $50 to $100 each, many companies try to save money by not “wasting” a profile on a candidate until later in the hiring process. I believe candidates should fill out profiles at the very beginning of the hiring process to avoid “wasting” your top executives’ time interviewing the wrong candidates. Overall, $50 to $100 is a small price to pay if it prevents your company’s CEO and top executives (i.e., Head of HR, COO, VP of Operations) from burning an hour or two at lunch with the wrong candidate. To get over this psychological hurdle, I recommend Culture Index because having your candidates fill out profiles will be guilt free. 

    My second favorite thing about Culture Index is they have come up with a brilliant system to make it easy to figure out if a candidate would be a good fit for each position. The hiring manager simply answers a bunch of questions about what kind of person would be well suited for the position and then Culture Index creates a template of which behavioral profile the ideal candidate would have. You can create unlimited templates, so you can have one for salespeople, bookkeepers, executives, front line employees, and then when your candidate fills out their profile, you can easily identify which position is the best fit.

    The Culture Index template keeps you and your hiring managers from lying to yourselves. You know what I’m talking about: You interview a candidate and you know that they probably aren’t going to be a good fit for the accounting department where you have an opening (since they’re a people-loving extrovert who gets bored with detailed work) but you justify it because they are so awesome and you really want them on your team. Two months later, you’ve spent countless hours training them to count your beans and they walk into your office one Friday afternoon and tell you they have accepted a position in sales with a competitor because they just can’t stand spending 40 hours a week managing your payables. Culture Index will help you avoid this trap because it gives you a visual graph of your candidate’s behavioral profile and compares it to the graph of what the ideal candidate for the position would look like, so you can’t cheat! Unless the graph of your candidate matches up with the graph you created for the position back in the cool, rational light of day, then you cannot make the hire.        

    Behavioral profiling using Culture Index is just the start of a world class hiring process. Once you have a candidate that fits the right profile, then you must determine how many times you’re going to interview them, what questions to ask in each interview, and how to close the deal once you’ve got one that you want to hire. For answers to several of those questions, I recommend the book “Who” by Geoff Smart and Randy Street.   

    DiSC Workplace Profile

    Once you hire a new employee, I like to use the Everything DiSC Workplace Profile to better understand who they are and how they are going to interact with the team. The DiSC profile places employees on a continuum of behavioral traits including Dominance, influence, Steadiness and Conscientiousness. I don’t use the DiSC as much for hiring, but more to lower turnover with the current team.

    After they have joined the team, I give new hires the DiSC and then I hold a staff meeting to discuss the results of their DiSC profile (depending on the size of the company, I’ll invite the entire staff or just the new hire’s department). Every new hire I’ve ever profiled has always been interested to learn about their own behavioral preferences and how they differ from their co-workers. 

    In the disaster mitigation and restoration world, business owners (and often their top managers) tend towards being high in the dominance (D) trait. This dominance is good for getting a fire damaged house cleaned up, but not always so good for morale. The challenge is high D’s drive towards getting the job done; however, immediate action is not always aligned with your client’s need for support, communication and compassion. As a business owner and leader myself, I often have to take a deep breath and spend some time with a client explaining what I am about to do and why before getting down to business. It isn't my natural behavioral tendency, but all it costs me is a little extra energy so that I can build rapport with my client and help them understand their situation better. The DiSC profile helped me learn this about myself and it has paid massive dividends. High D’s like me often need some help in the emotional intelligence department.

    The good news is we can all choose to modify our behavior depending on the situation. For example, if I give a new employee the profile and find that they are high in the dominance trait, I can make them aware of this tendency to be overly aggressive so they understand that sometimes their unbridled need for results can be overwhelming. I don't want them to change their personalities, but rather understand that situationally they may need to temper their exuberance when it's time to complete interact with a client whose home or business has recently been destroyed by water or fire.

    There is another huge benefit to the Everything DiSC profile. They offer free “comparative” reports, which allow you to take any two employees you’ve profiled and run a report that will show them how they are alike and different and offer suggestions on how they can work better with one another. Many times when employees approach me with a “we can’t get along” problem, I won’t even broach the subject until I’ve given them a comparative DiSC report and they’ve read it over and met to work it out amongst themselves. This approach doesn’t work for every employee conflict, but many times a little bit of perspective on each other’s natural behavioral tendencies allows them to see things from the other’s point of view and solve their issue. One more tip: My wife and I each took the DiSC and ran our comparative report and it has worked wonders for our marriage! 

    To start using DiSC, I recommend you invest in profiling every one of your current staff members (each profile costs about $45-$55). I use a third-party website to manage all of my profiles. I recommend www.resourcesunlimited.com to my clients since they have always given me excellent support. They make it easy to email each employee their online profile, and they manage filing all the completed profiles in an online database. I have 24/7 access to all of my staff's profiles. Plus, I can print free reports using their cloud based service. 

    Every business has trouble with hiring, and if you have more than one employee, then undoubtedly you have people issues from time to time. Behavioral profiling has been a silver bullet for me in making people issues more manageable by using tools that are a lot more reliable than my “gut.” I’m not saying your gut shouldn’t play a role in the hiring process; however, the more you systematize your approach, the more you can rely on others to help you hire, interview, and manage as your company grows. Our industry has enough unknowns already—use behavioral profiling and hiring won’t be a disaster for your company!

    Jonathan Slain is the founder of Disaster Ventures Unlimited which provides consulting and other services to disaster businesses that want to double in size or sell within five years.  He can be reached at jpslain@gmail.com or 216-870-4219.  

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    Next up: ADR Clauses in Contracts: Should You Mediate, Arbitrate or Litigate?
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  • ADR Clauses in Contracts: Should You Mediate, Arbitrate or Litigate?

    Should you negotiate means for Alternative Dispute Resolution into your next business contract?

    Alternative Dispute Resolution (ADR) refers to either mediation or arbitration, which provide alternatives to litigation. ADR, by comparison to traditional litigation, can sometimes be a less expensive, less risky means for parties to a contract to resolve their disputes.

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    Unsurprisingly, then, parties to business contracts routinely include ADR clauses as a precaution against potentially becoming embroiled in a lengthy, protracted dispute with their counterparts in court. However, there are circumstances in which an ADR clause might not be appropriate, depending on the sophistication of the parties, the nature of the contract and the kinds of disputes that can arise from it, among other factors.

    In this post, we focus on whether and the extent to which ADR, specifically, mediation (arbitration was discussed here) should be negotiated into your next business contract. For now, it will suffice to know that, while arbitration and mediation share similar pros and cons, the most important difference between the two is that arbitration automatically yields a binding decision, whereas mediation does not. In practical terms, this means if the parties to a dispute cannot reach a settlement through mediation, they remain free to pursue their claims in court (or through arbitration).

    What Are the Objectives of Mediation?

    The objective of mediation is to resolve a dispute by informally talking through issues in a low-pressure environment conducive to open communication. Discussions are facilitated by the mediator, who is usually an attorney, and who might also have experience practicing in whatever area of law is relevant or applicable to the parties’ dispute. The mediator seeks to ease tensions and facilitate negotiation and dialogue between the parties by speaking to them both jointly and individually.

    What Are the Benefits of Mediation?

    There are no “winners” and “losers” in mediation. The only outcome that can be reached through mediation is one that both parties agree on.

    Some statistics suggest mediation might be a more productive forum for dispute resolution to traditional litigation. For example, the Federal Mediation & Conciliation Service (a federal agency designed to mediate labor disputes that was created in 1947 under the Taft-Hartley Act, 29 U.S.C. §§ 141–197) reported that 87.1% of the negotiations it was involved with in 2017 achieved settlements.

    Moreover, if the parties cannot reach an accord through mediation, they can still decide to litigate (or arbitrate) their dispute. The costs of litigation (and to a lesser albeit similar extent, arbitration), however, provide a significant incentive for parties to reach settlements at mediation. By avoiding litigation and everything it involves (depositions, document requests, subpoenas, motion practice, trial, etc.) the parties are better able to control costs and mitigate risks. The costs of attending mediation, which are nominal compared to the costs of filing a lawsuit, are borne equally by the parties. Mediation and its outcome are also private and just between the parties. The privacy of mediation is generally regarded as a benefit, unless an aggrieved party wants to bring public attention to an issue, in which case a lawsuit, which naturally becomes part of the public record, may be more appropriate.

    Mediation can also bring closure to a dispute much faster than litigation. From this perspective, contracts containing ADR clauses likely also alleviate burdens on the court system. Indeed, courts frequently encourage or, in some circumstances, even order litigants to attend mediation before permitting their case to proceed to trial. Not doing so might mean backlogged court dockets for years or even decades. For (an extreme) example, some courts in India have a backlog of cases through the year 2330.

    When Should Mediation Be Avoided?

    Of course, there are also times when mediation might not be the best means for resolving a dispute. The history of the parties’ business relationship, for example, might not make it worthwhile to negotiate an ADR provision into a contract. Mediation usually works best between parties who approach it with a ready and open willingness to communicate and resolve their dispute. Mediation is less likely to produce a successful resolution if one party goes into it with an inflated belief in the strength of its position—whether that belief is true or not.

    Mediation is also not well suited for resolving disputes that arise from intentionally deceptive or other bad faith conduct. For instance, parties that stand accused of engaging in deceptive behavior seldom admit to engaging in that conduct, which leaves very little, if any, neutral ground for negotiation. Claims arising from this conduct are therefore best pursued through arbitration or litigation.

    Of course, if the parties negotiating a contract are uncertain about the desirability of mediation, they can always propose revisions tempering the restrictiveness of the ADR clause. For example, the parties can agree that they “may” rather than “must” resolve any disputes arising from their contract through arbitration or mediation. Parties can also agree to attempt to resolve disputes through mediation first before escalating to arbitration or litigation.

    This article is meant to be utilized as a general guideline for mediation clauses in contracts. Nothing in this blog is intended to create an attorney-client relationship or to provide legal advice on which you should rely without talking to your own retained attorney first.  If you have questions about your particular legal situation, you should contact a legal professional.

    Max Julian is an attorney at The Gertsburg Law Firm. Julian’s practice is focused on commercial litigation. He can be reached at mj@gertsburglaw.com or by phone at (440) 571-7541.


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