David A. Hoffman
Viktor was fired from his job as a project manager of a U.S.-based petroleum exploration firm in late 2000. He claimed he was fired because of his race/nationality. The company said he was fired because he treated co-workers abrasively and was not a team player. Both sides agreed that mediation was a good idea.
The Plaintiff. Viktor grew up in one of the republics of the former Soviet Union and was recruited to join the company because he had an engineering degree, an MBA, and extensive experience in the petroleum industry. Above all, he knew all the players in his country. He was earning $223,000/year at the time he was fired.
The Defendant. The company operates in a dozen countries around the world and has annual sales of several billion dollars. One of its goals was to protect its business relationships in Viktor’s country. Another goal was to make it clear to its staff that it would not tolerate violations of the company’s norms regarding collegiality and teamwork.
The Dispute. From the company’s standpoint, the last straw was a stream of emails that Viktor sent, castigating his colleagues in the company. In one email to his boss, he described his boss’s ideas as “nonsense – another example of how you are way off the mark,” and said “you have shown absolutely no leadership.” He was given reviews over the course of two years warning him that his communications needed to be more collaborative or he would be fired. But the emails continued, and he was fired and offered a severance package in exchange for a release. Viktor refused to sign the release, claiming that he was fired as retaliation for his complaints about unfair and discriminatory treatment. He alleged that the U.S. nationals in the company were getting bonus compensation and he wasn’t. He was particularly upset, he said, “because the company is now poised for success as a result of my efforts.”
The Mediation. Everyone was on their best behavior when the mediation began in late January 2001: the company’s CEO, their outside counsel, Viktor, and his lawyer each spoke in the initial joint session. Various interests were explored, but the crux of the case was money. There would be no re-employment, no apology, and Viktor felt he did not need a job recommendation from the company. Viktor’s counsel reiterated a settlement demand of $2.8 million, based on lost wages, front pay, emotional distress, and legal fees. The company reiterated its original severance package offer (approximately $150,000).
First Caucuses. Both sides requested that I meet with them separately in caucus sessions. The company increased its offer to $250,000. They said Viktor was wrong about the bonuses, but they wanted to settle in order to preserve the company’s good relationships with trading partners in Viktor’s country. Viktor rolled his eyes when I reported the company’s $250,000 offer. “They don’t understand how I can help them, or hurt them,” he said. “If they don’t meet my demand, they won’t be able to operate in my country.” He said he was considering reducing his demand to $2.5 million, but his lawyer (one of the most experienced and successful plaintiff’s employment lawyers in New England) thought he should reduce it more. “Your lawyer has a lot of experience with this type of case,” I said. “Why are you reluctant to take her advice?” Viktor wouldn’t budge. Fearing an impasse if I communicated the $2.5 million demand, I asked both sides whether it might be a good idea for the CEO and Viktor to meet – either one-on-one or with me in the room as referee. The CEO liked this idea. So did the plaintiff.
Joint Session with the Parties. The three of us met for almost an hour. The mood was intense, as they looked across the conference room table at each other. “I was the one who recruited you, trained you, coached you,” the CEO said to Viktor. “When the negative reviews started coming in, I took you out for dinner. I told you to clean up your communications or I was going to fire you myself.” Viktor recalled all of this, but claimed that his co-workers were wrong and deserved his criticism. “I am being punished,” he said, “for simply telling the truth and trying to save the company from the incompetence of some of its key players.” As their discussion proceeded, it became clear that neither would persuade the other. I asked whether there could be any on-going business connection. “Absolutely not!” both said. “Do you think there is room to find common ground on the settlement terms?” I asked. At that point Viktor stared at the CEO and said, “I respect you as a person. And as a sign of my respect to you, I am willing to settle this case for $1.5 million. That is my final offer – take it or leave it.” The CEO looked surprised at this outburst. “We’re not going to pay you $1.5 million to settle this case,” the CEO said emphatically, “but I will talk with my team and see what we can do.” Before adjourning the mediation session, we scheduled phone conferences for February.
Phone Conferences. I spoke first with the company’s counsel, who increased the company’s offer to $350,000. Then the negotiations started to get weird. In a lengthy phone conference, Viktor and his lawyer authorized me to communicate a settlement proposal of $750,000, but they wanted me to know (confidentially) that they would be willing to accept $680,000. Viktor said to me “$750,000 is a very low number, but I am doing this out of respect for you.” I called defense counsel, and communicated the $750,000 offer. Then I got an email from Viktor instructing me to revoke the $750,000 offer. “Tell them I want $900,000 or $950,000 – I will take either,” he said, “but I am telling you confidentially that I would accept $766,000.” I wrote back to Viktor and his counsel that I could not un-ring the bell of $750,000. “I don’t care,” he said. “$900,000 or $950,000 is my offer.” What the heck is going on here? I thought to myself.
I called defense counsel, relayed the news, and a few days later, she asked me to communicate the company’s offer of $525,000, payable over 4 years and with a non-compete. They said (confidentially) that they would be willing to go as high as $650,000. More phone conferences with Viktor and his lawyer in March led to what Viktor described as his “final offer” of $1.275 million – the non-compete, he said, “is worth a lot of money to the company.” He also insisted that the company provide “clarification” of the non-compete language – detailed definitions of all of the operative phrases in the non-compete agreement. Viktor’s lawyer suggested that they hold off on this unusual request for clarification.
Email Exchanges. At this point, Viktor fired his lawyer, who was counseling moderation, and, in an email, Viktor instructed me to communicate his request for detailed definitions of all terms “without any added input or editorial comment to me or to the other side.” Viktor was also furious with me – particularly because I was urging him to listen to his lawyer. “You don’t understand,” he said in an email to me. “I have dealt with almost all of the largest law firms in the world. I have negotiated deals in my country that George Schultz was unable to negotiate.” He insisted that he was a better negotiator than his lawyer. “I ALWAYS have an upper hand somewhere over whoever opposes me WITHOUT exception,” he wrote. “You are driving a wedge between me and my lawyer by urging me, in her presence, to listen to her, and I will hold you accountable for that.”
I was stunned by these emails. They sounded grandiose. Was this a bargaining style? Was the idea of increasing a monetary demand in the middle of the negotiation an acceptable part of the bargaining culture in his country? I consulted with a mediator colleague who had worked in that country. “The negotiation style there is a little different,” my friend said. “They sometimes feel that it’s okay to reopen points even after they appear to be settled. But this behavior seems out of the ordinary.”
I consulted with my wife, an experienced psychotherapist, and showed her redacted versions of the email exchange, omitting all identifying information. “He sounds narcissistic,” she said. “It sounds like you poked him in the spot where he gets easily bruised – namely, by suggesting that his lawyer was more knowledgeable and experienced than he was. He needs to feel important.”
After another round of email exchanges in which I tried to repair the damage, it became clear the mediation was over. He said that he was unwilling to pay for additional mediation, and that he should not have to – I should be willing to continue without payment. I told him that I would not do that and withdrew.
Coda. I learned subsequently that he settled the case directly with the company’s counsel, accepting a good deal less than he insisted was his final offer. But at least he had the satisfaction of dealing directly, in the end, with one of the largest law firms in the U.S. and taking sole credit for making the deal.
Post-Mortem. In later consideration of this case with counsel and with my wife, I have come to the conclusion that a narcissistic personality was likely one of the root causes of Viktor’s erratic bargaining and, in all likelihood, the behavior that led him to be fired. It was a mistake on my part to urge him so strenuously to listen to his lawyer once I sensed his resistance to that suggestion. He probably felt shamed by my suggesting, in the presence of his lawyer (whom he evidently viewed as an ‘employee’ and therefore subordinate), that she was more knowledgeable than he was. Greater finesse in dealing with his sense of self-importance was needed. I also have thought about how I got ‘hooked’ by his resistance to my suggestions – the way in which I felt my own sense of competence to be undermined, which then led me to be less skillful, less centered, and more argumentative with him than I should have been. In addition, the extensive use of email toward the end of the case was a mistake. He had already demonstrated at work that he could not resist the impulse to use email as a podium for confrontation rather than communication. Finally, even though Viktor’s narcissism may have played a large part in making this a difficult mediation, one cannot ignore the impact of culture and gender. His bargaining style – and in particular the dynamic between Viktor and the CEO – seemed to be part of a struggle between two successful males, each determined to be the ‘alpha’ male in a cultural setting that fosters such competition. One can imagine different formats for these discussions – for example, more informal face-to-face meeting time with just Viktor, the CEO, and me, perhaps over dinner – proving to be more successful in addressing, and perhaps overcoming, that dynamic.
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[David A. Hoffman is a mediator, arbitrator, Collaborative Law attorney, and founding Member of Boston Law Collaborative, LLC, a multidisciplinary firm that includes lawyers, mediators, arbitrators, and mental health and financial professionals. He teaches the Mediation course at Harvard Law School, where is the John H. Watson, Jr. Lecturer on Law. He is past chair of the ABA Section of Dispute Resolution and co-editor (with Daniel Bowling) of the book Bringing Peace into the Room (Jossey Bass 2003). He can be reached at email@example.com]
[Copyright 2011 – permission to reprint is hereby granted if this notice appears and distribution is free.]
Identifying information in this case study has been changed to protect the confidentiality of the process.