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Suing To Enforce Mediated Settlement Does Not Violate Mediation Agreement

What happens at the mediation stays at the mediation. That’s the gist of a typical mediation agreement. The parties agree that information exchanged during the mediation is confidential and inadmissible. They also agree not to institute any action based on the mediation. So what happens when the parties disagree about whether the mediation produced a binding settlement agreement? How does a party sue to enforce a mediated settlement without violating the confidentiality and other provisions of the mediation agreement?

The Georgia Court of Appeals recently addressed that issue in Omni Builders Risk v. Bennett. In that case, an employee filed a charge of pregnancy discrimination against her former employer.   The employee was required by contract to mediate the claim with her former employer, which she did. At the beginning of the mediation, theparties signed a fairly standard mediation agreement; it stated that “all that occurs during the mediation process shall be confidential . . . and shall not be revealed in any subsequent legal proceedings.” It also stated that “all parties agree not to institute any action based on the mediation.”

A dispute arose as to whether the parties reached a binding settlement at the mediation. The employee claimed the parties agreed to settle her claim for $65,000.00; the employer disputed that any such agreement was reached. The employee therefore sued to enforce the mediated settlement. The employer countersued, alleging that the employee’s lawsuit violated the confidentiality provisions of the mediation agreement. The trial court and the Court of Appeals both sided with the employee.

The appellate court distinguished between lawsuits over the mediation process and lawsuits over mediation outcomes. It stated:“[The employee] brought suit not as to anything that occurred during the parties’ settlement negotiations (the ‘mediation process’), but rather as to an allegedly complete settlement agreement. Accordingly, because [the employee’s] lawsuit was based on the result of the mediation process, and not the process itself, [she] did not violate the confidentiality provision of the mediation agreement. Finally, if we were to bar a party from attempting to enforce a settlement agreement, we would undermine the rule that ‘when parties have entered into a definite, certain, and unambiguous agreement to settle, it should be enforced.’ (citations omitted) Because [the employee] did not breach the plain terms of the mediation agreement when she filed suit to enforce a settlement allegedly reached as a result of mediation, the trial court did not err when it dismissed [the employer’s] counterclaim for breach of the mediation agreement.

The line the Court drew is a sensible one. It preserves confidentiality as to the mediation process, which is important because it facilitates the free flow of information between parties and, therefore, the resolution of claims. But it also preserved parties’ ability to enforce the agreements reached at mediation without fear of reprisal.

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