If you are wondering what to expect at employment mediation in California, here is the short answer: you will spend one long day, usually in a separate room from your former employer, while a neutral mediator carries offers back and forth between the sides. Nothing is decided unless you agree to it. What is said is confidential, and if the case settles, you sign a short written agreement before you go home that makes the deal binding.
Most California employment cases settle, and most of those settlements happen at mediation. Knowing how the day works, what the settlement papers will say, and how to prepare emotionally makes a real difference in how you decide. I see the process from both chairs: I have spent my career as a plaintiff-side trial lawyer, and I also serve as a mediator through AMAJ. This guide is for employees and families who want to walk in knowing what is coming.
What employment mediation is, and what it is not
Mediation is a confidential negotiation run by a neutral third party, usually a retired judge or an experienced employment lawyer. The mediator does not decide who is right and cannot force anyone to settle. Their job is to help both sides see the risks of continuing and find a number everyone can accept.
That is very different from the alternatives:
- Trial: A judge or jury hears evidence and issues a verdict. It is public, it can take years to reach, and the result can go either way.
- Arbitration: A private arbitrator acts like a judge and issues a binding award, usually with very limited appeal rights. Many California employees are in arbitration because they signed an arbitration agreement when hired.
- Mediation: No one wins or loses. You keep full control. If you do not like the final offer, you can say no and keep litigating.
Private mediation vs. court-ordered mediation
Most employment mediations in California are private: the lawyers agree on a mediator, schedule a full or half day, and the parties pay the mediator's fee (in employment cases, the employer often covers most or all of it). Some courts also order or strongly encourage mediation or a settlement conference before trial. A court-run session may be shorter and handled by a volunteer panel mediator or a judge. The core rules are the same: it is voluntary to settle, and the discussions are confidential.
What to expect on the day of employment mediation
Every mediator runs the day a little differently, but a typical California employment mediation follows this arc.
Before the day: the mediation briefs
About a week ahead, each side's lawyer sends the mediator a confidential brief laying out the facts, the law, the damages, and the obstacles to settlement. Your lawyer may share some or all of your side's brief with the other side. As a mediator, I also hold pre-mediation calls with both sides, so I understand what really matters to each party before anyone walks in the door.
The opening
Joint opening sessions, where everyone sits in one room, have become less common in employment cases. More often, the mediator meets your team privately first to hear your story and ask questions. If there is a joint session, your lawyer will tell you in advance whether you are expected to speak.
Caucuses and separate rooms
For most of the day you will sit in your own room (or a private video breakout room) with your lawyer. The mediator moves between rooms. These private meetings are called caucuses. Expect a lot of waiting. The mediator may spend an hour with the other side while you sit. That is normal and often a good sign.
Offers and counteroffers
Negotiation usually starts far apart. The employee's first demand is high; the employer's first offer can feel insulting. Each side then moves in rounds. The size of each move is a signal, and your lawyer will explain what each one means. Do not judge the day by the first number.
The mediator's proposal
If the sides stall, the mediator may make a mediator's proposal: a single number and terms the mediator believes both sides can accept. Each side answers yes or no confidentially to the mediator. If both say yes, the case settles. If either says no, neither side learns how the other answered.
Why mediation often runs late
Many mediations go into the evening. Decision-makers need time, insurance adjusters must get authority, and people often make their best moves only once they feel the day is ending. Plan for a long day and do not book anything that evening.
Mediation confidentiality under California law
California has some of the strongest mediation confidentiality protections in the country. Under Evidence Code § 1119, what is said and written for the purpose of mediation generally cannot be used as evidence later in the case. That allows everyone to speak candidly about weaknesses without it being used against them at trial.
Because those protections are so broad, they can also limit what you can later prove about your own lawyer's conduct during the mediation. For that reason, Evidence Code § 1129 requires California lawyers to give clients a short written disclosure explaining mediation confidentiality, and to have the client sign it, before the client agrees to participate. If your lawyer hands you this form, read it, ask questions, and sign it. It is routine.
How a mediation settlement becomes binding
A handshake at 7 p.m. is not enough. A settlement reached at mediation should be put in writing before anyone leaves, usually in a one- or two-page term sheet or memorandum of settlement. Two points matter:
- Because of mediation confidentiality, the written agreement should state that it is enforceable or binding, so it can be used in court if someone backs out.
- Under Code of Civil Procedure § 664.6, a written settlement signed by the parties (or, since 2021, by their attorneys) can be enforced by motion, and the court can keep jurisdiction to enforce it if the parties ask.
A longer, formal settlement agreement usually follows in the next few weeks, but the term sheet is what locks in the deal.
Typical settlement terms in a California employment case
Beyond the dollar amount, expect to see:
- Release: You give up the claims you have (or could have) against the employer, usually including a waiver under Civil Code § 1542 for unknown claims. Certain rights cannot be waived, such as some claims for workers' compensation or unemployment benefits.
- Dismissal: Your lawyer dismisses the lawsuit or arbitration once payment is made.
- Payment timing and tax allocation: How much is treated as wages and how much as other damages.
- No rehire, neutral reference, and non-disparagement clauses are common.
- Confidentiality: Usually covers the settlement amount. But California law limits how far it can go.
Limits on confidentiality for harassment and discrimination claims
Under Code of Civil Procedure § 1001, a settlement agreement in a case filed in court or before an agency generally cannot prevent you from disclosing factual information about claims of sexual assault, sexual harassment, or workplace harassment, discrimination, or retaliation under the Fair Employment and Housing Act. You can ask that your own identity be kept confidential, and the amount paid can still be kept confidential. Separately, Government Code § 12964.5 requires that non-disparagement and similar clauses in employment-related agreements include language confirming that nothing in the agreement prevents you from discussing or disclosing information about unlawful acts in the workplace. You can read about these protections on the California Civil Rights Department website.
Taxes on employment settlements, in general terms
Most employment settlement money is taxable. The portion for lost wages is usually paid through payroll with withholding and reported on a W-2. Emotional distress and other non-wage damages are generally reported on a 1099 and are taxable as well, unless tied to physical injury. Federal law has an above-the-line deduction for attorney's fees in discrimination and certain other employment cases. Talk with a tax professional before you sign; the allocation is worth getting right.
How to prepare for mediation, practically and emotionally
In my practice, the clients who do best at mediation are the ones who prepared for the day, not just the case.
- Know your numbers. Ask your lawyer to walk you through the best case, worst case, and most likely outcome at trial, plus the time it would take and the fees and costs that come out of a recovery.
- Decide what matters besides money. A neutral reference, a resignation instead of a termination on your file, or timing of payment can sometimes be traded for.
- Bring the people you rely on, if allowed. A spouse or family member who will help you decide can be valuable, but confirm with your lawyer first because confidentiality rules apply to them too.
- Expect to feel insulted. Early offers are tactical, not a judgment about your worth.
- Take care of yourself. Eat, bring medication, chargers, and something to read. Fatigue makes for bad decisions.
- You can say no. A fair settlement is one you can live with. If the number is not there, your case continues.
Excellence is expected, but empathy is required.
That line guides my firm, and it is how I run a mediation room too. Employees are often reliving the worst chapter of their working life. A good mediator respects that while still being honest about risk.
Why a trial lawyer makes a credible mediator
I mediate through AMAJ, a Pasadena-based ADR education and dispute-resolution institute I am spearheading. Because I try cases, including a $2,000,000 jury verdict in a gender discrimination and wrongful termination case, I can speak credibly to both sides about what a jury is likely to do. My full-day mediation is $10,000, all-inclusive. I hold pre-mediation calls with both sides, give an evaluative view when it helps, and follow up after the session until the deal is signed. Learn more on my mediation page, or read my preparation checklist for counsel.
The bottom line on employment mediation
Employment mediation in California is a long, private, voluntary negotiation, and it is where most cases end. Know your numbers, understand confidentiality and the settlement terms, insist on a signed term sheet, and give yourself permission to say yes or no. If you are an employee who needs a lawyer before mediation, or counsel looking for a neutral, contact Jonathan LaCour to start the conversation. You can also learn more about Jonathan and his work at Employees First Labor Law.
Frequently asked questions.
How long does an employment mediation take in California?
Most private employment mediations are scheduled for a full day, roughly eight hours, and many run into the evening. Half-day sessions exist for smaller cases. The time goes to private caucuses, waiting while the mediator works with the other side, and drafting the written term sheet if the case settles before everyone leaves.
Do I have to accept the settlement offer at mediation?
No. Mediation is voluntary. The mediator cannot force you to settle, and you can reject any offer. If no deal is reached, your lawsuit or arbitration continues where it left off. Your lawyer should give you an honest view of the risks of going forward so your decision is informed, but the final choice is always yours.
Will I have to face my former employer at mediation?
Usually not for long, if at all. Most California employment mediations keep the parties in separate rooms or separate video breakout rooms for nearly the entire day. The mediator carries offers between the rooms. If a joint session is planned, your lawyer will tell you in advance and prepare you for it.
Is what I say at mediation confidential?
Generally yes. Under Evidence Code section 1119, statements made and documents prepared for the purpose of mediation are generally not admissible later in the case. Before mediation, your lawyer must give you a written disclosure about these confidentiality rules under Evidence Code section 1129 and have you sign it.
Is a mediation settlement taxable?
Usually most of it is. Lost-wage portions are typically paid through payroll with withholding, and emotional distress damages are generally taxable unless tied to a physical injury. Federal law allows an above-the-line deduction for attorney's fees in many employment cases. Consult a tax professional about your allocation before signing.