John and Bernie, partners at a recently formed software engineering company, are being sued by one of their junior associates for wrongful termination. The junior associate is alleging breach of contract and the implied duty of good faith and fair dealing. The partners insist that their decision was based on merit, but they agree with their attorney’s risk analysis that they stand at least a 60 percent chance of being found in breach of their contractual obligations. Comparable jobs in the area are scarce, and the plaintiff’s preexisting health condition renders her loss of health insurance particularly devastating. The combination of her lost future salary, inability to find comparable employment, and likely high costs of self-insuring could push her damages toward the $600,000 to $800,000 range.
What ethical issues present themselves in this scenario, and what could a mediator do to resolve them?
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