Market Intelligence: Labor & Employment Insights Revealed in the Practical Guidance Private Market Data Survey

By: Practical Guidance Labor & Employment Attorney Team

PRACTICAL GUIDANCE RECENTLY COMPLETED THE ANNUAL PRIVATE MARKET DATA LABOR & EMPLOYMENT SURVEY, which ran from August 25 through September 30, 2023. This survey asked labor and employment attorneys from across the country to identify trends concerning settlements resolving employment discrimination, harassment, and retaliation claims in 2022 and 2023.

After analysis of the survey results by our team of internal author attorneys with experience negotiating employment discrimination settlement/separation agreements, a few notable insights emerge. The following analysis is based on that data.¹

Frequency Of Settlements

According to the data received, 61.29% of the attorneys surveyed indicated that they noticed an increase in the percentage of employment discrimination/harassment/retaliation claims resulting in settlement compared to the prior year. By contrast, 29% of those surveyed indicated no change and 9.68% indicated a decrease in the percentage of claims resulting in settlement.

Reasons For Settlements

Respondents listed potential legal exposure in connection with the employee’s allegation as the single most important specifically identified reason impacting the decision to enter into a discrimination/harassment/retaliation settlement agreement. The strength of the employee’s case was the next highest specific reason cited.

Mediation

Mediation is a non-binding, informal, and confidential negotiation in which a neutral third party actively promotes a mutually acceptable settlement. Parties often attempt to resolve employment law disputes through mediation to reduce the uncertainty and expense inherent in litigation. The mediator facilitates negotiations between the two parties, while the parties retain complete control over the dispute and resolution. According to the data received, 83.87% of the attorneys surveyed indicated that mediation helped them resolve discrimination, harassment, and retaliation disputes, whereas only 16.13% indicated that mediation did not help the resolve such disputes.

These findings are consistent with our previous survey, which found that the parties in 36.5% of the matters that were part of the study participated in either court ordered or voluntary mediation and that the vast majority of those mediations (87.5%) resulted in settlement. 

Non-Disparagement

With the intense emotions (on both sides) that often accompany allegations/claims of discrimination, harassment, and retaliation, parties are often concerned about the potential for reputational damage—notwithstanding the possible availability of defamation and tortious interference claims.

According to the data received, non-disparagement provisions were one of the most important provisions insisted on by employers that nevertheless encountered resistance from employees. This is consistent with our previous survey, which found that non-disparagement clauses were contained within 76% of the Agreements referenced in that study. Notably, in our current questionnaire results, 53% of the Agreements containing a non-disparagement clause contained a bilateral non-disparagement clause, protecting both sides, while 47% contained a unilateral non-disparagement clause.

Additional Trends

The attorneys responding to our survey reported additional trends emerging over the past year regarding settlement/severance agreements resolving employment discrimination/harassment/retaliation claims, including:

• Increase in disability and failure to accommodate claims
• Increase in claims by employees that remain employed
• Increase in nonmonetary fixes at employer’s place of business
• Increase in constructive termination claims 

1. More than 30 Labor & Employment practitioners responded to the Practical Guidance Private Market Data Survey during August and September 2023.