Resolving a dispute by mediation requires that both parties agree to mediate the dispute. It also requires a good faith effort by the parties to resolve the dispute, not to determine who is right and who is wrong. Nonbinding mediation may not work when one party strongly believes he or she is entitled to punitive or extra damages that can be awarded only by a judge via litigation.

How it works. Various community associations, private enterprises, and the American Arbitration Association (AAA) offer mediation services. The AAA is often selected to assist parties in the mediation process. It is a public-service, nonprofit organization that offers dispute-settlement services to business executives, employers, trade associations, unions, and all levels of government. Services are available through AAA's national office in New York City and through 25 regional offices in major cities throughout the United States.

A list of various mediation and dispute-resolution organizations is included at the end of this chapter.

Once both parties agree to try to solve their differences through mediation, a joint request for mediation is sometimes made through an AAA regional office. The request identifies the parties involved in the dispute, gives their current addresses and phone numbers, and briefly describes the controversy and the issues involved. The employee and the company should include whatever information is helpful to appoint a mediator.

The AAA assigns a mediator from its master list. The parties are then given information about the mediator. Typically, the mediator has no past or present relationship with the parties. A mediator is free to refuse the appointment or resign at any time. Likewise, the parties are free to stop the mediation or ask for the services of a different mediator. If a mediator is unwilling or unable to serve, or if one of the parties requests that the mediator resign from the case, the parties may ask the AAA to recommend another mediator. The mediator is compensated on either an hourly or daily basis. Both parties are informed of potential mediator fees and are sometimes requested to sign a document evidencing approval of the compensation arrangement and an agreement to share fees.

After the initial interview takes place and the mediator is found to be acceptable, he or she will arrange the time and place for each conference with the parties. At the first conference, the parties will be asked to produce information required for the mediator to understand the issues. The mediator may require either party to supplement such information. The mediator will explain what the parties should expect. Good mediators explain that the process is entirely voluntary, that they are not judges and have no power to dictate solutions, and that the parties are free to terminate the mediation process at any time.

A mediator does not have authority to impose a settlement but will attempt to help the parties reach a satisfactory resolution of their dispute. Although usually trained in law, the mediator is not supposed to give legal advice. While parties do not have to be represented by counsel at the mediation sessions, most claimants and employers retain attorneys in employment and business disputes.