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Professor: Hostess Mediation May Not Help Indiana Employees

By Gretchen Frazee

Posted November 20, 2012

Updated 7:30 p.m.

Hostess Brands has announced it will move forward with plans to liquidate the company after the mediation with its workers union failed Tuesday, the Wall Street Journal is reporting.

Read the original story below:

After announcing it would begin liquidation because of nationwide strikes, Hostess Brands has begun mediation with the union that represents most of its employees. Still, the mediation may not provide much hope for employees in Indiana.

Hostess Brands employs more than 800 workers in Indiana. After those employees and their counterparts across the U.S. refused to cease striking last week, the company announced it would sell off its assets. A judge has since ruled that Hostess must mediate with union before its case can be heard in court.

Indiana University School of Public and Environmental Affairs professor Nan Stager says 80 percent to 90 percent of cases that go to mediation get resolved but not when it comes to labor disputes.

"In terms of research, more like 60 percent of labor relation types of disputes are successfully resolved," she says. "They have one of the lowest resolution rates of any kind of mediation case."

And Stager says if Hostess really has as little money as it says it does, the company may have no choice but to go bankrupt. Still, she says mediation is better than trying to settle the matter in court.

"The good thing about mediation is you can talk about anything the parties want to talk about so it's a little broader in that way and you can agree to really anything."

In other words, she says, they do not have to stick to legal issues and are therefore more likely to find an agreement that both parties can agree to.

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