Some cases start with negotiations. Unfortunately, many employers take a position that they do not want to settle with former employees for fear that it sets bad precedence. Moreover, they have more resources and no emotional drain in fighting hard, so as to deter lawsuits they may not be willing to settle or participate in a dispute resolution process early or ever. If your case can be settled without filing a lawsuit, you save time, money, and emotional energy.
Many times a case cannot be settled immediately. Many times it cannot be settled at all because an employer stonewalls and makes the employee fight for a dime.
However, settlement negotiations can and do take place at any stage of litigation (even after trial) and as a case progresses the parties get more and more information which can lead to settlement. In the end, most cases settle without a trial. It is hard to predict how a specific employer will respond, and many times no settlement offer is made until a plaintiff prevails at the summary judgment stage.