The short answer is, of course, as soon as you can make it effective.
Employment disputes are often more emotional for the parties because the employer believes that it has taken all necessary action to protect all of its employees and that it has been unjustly accused. The employee has often been emotionally injured because he or she has been terminated from the job he or she has held for months or years and feels unjustly attacked.
Before the Employee Has Been Discharged: Often this is the optimal time to resolve. Unfortunately, it is the least common. At this point the parties are in the enviable position of sitting down eye-to-eye and putting the genie back in the bottle by clearing misconceptions, soothing anger and reaching a true workable solution. In ADA and FMLA cases, often accommodations can be agreed upon allowing the employee to remain productive and the employer to keep the benefits of a trained and needed employee.
Early in the Litigation – Before Discovery: Before spending a great deal of money on lawyers and the litigation, risking exposure of potentially private or confidential documentation or otherwise diverting the time of employees needed in depositions, employers may want to mediate. At this early stage, employees often wish to resolve before the stress of reliving emotionally charged events in a deposition. This is an opportune time to mediate.
After Initial Discovery: Often the parties wish to conduct some initial paper discovery and perhaps the plaintiff and an HR rep or the decision maker may allow for a more educated view of the risks and benefits of continuing the litigation. This is likely the most optimal time to mediate; the parties have a realistic view of the case but the litigation costs are still under control.
After a Summary Judgment Motion Has Been Filed: Employment cases lend themselves to summary judgment more commonly than perhaps any other type of case. It may be an ideal time to mediate, pending a summary judgment. There are real consequences looming. For the Employee, if summary judgment is granted, the case may be over. For the Employer, if summary judgment is denied, a full trial on the merits is a virtual certainty. The risks are monumental for both sides, and this extra pressure often leads to a successful resolution.
Eve of trial, mid-trial or post-trial: This is the most difficult time to mediate; but hope is not lost. By this time, the lawyers have devoted a great deal of expense to the case, as have the parties. Everyone is emotionally invested and if after trial, the bargaining power of the parties is typically unequal. However, this may be the last best hope for amicable resolution.
There are great advantages to mediation of Employment Law disputes as early in the case as both sides can have a full understanding of the facts and issues as well as a desire to reach closure.