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Confidentiality - What are your thoughts?

Confidentiality is a bedrock foundation of most ADR processes. But is that time-honored attribute contributing to (a) the lack of regard or disdain that certain segments of the American public appear to have towards mandatory arbitration in the employment and consumer fields; and (b) the lack of diversity in the selection of ADR neutrals? Let us know your thoughts.

Please provide your thoughts/comments below.

Comments (11)

I can't comment on (b), but confidentiality is perfectly appropriate in B2B transactions. In employment discrimination and especially sexual harassment, it can hinder the administration of justice.

(a) Like anything else that smacks of legalese, the typical consumer only hear bad things about arbitration where they must go along with it and have no choice in choosing a neutral. It seems to me that there is an education element that is missing that the AAA could provide in consumer outreach. That, plus changing the ground rules so that the consumer has some say in how and where the hearing is conducted.

(b) I'm not sure what is meant by 'lack of diversity'. If the meaning is that the neutrals might be not of the same race or economic status as the consumer, then why not have available a "neutral of your peers", as in court cases?

Judge Andrew Peck (ret.):

I do not see any connection between privacy and these topics. The lack of regard for arbitration in those areas is from a perception that it is pro employer, taking away the right to a jury trial and preventing class actions, among other factors. And as to lack of diversity, that is more an issue of the difficulty of breaking into the field, perhaps an "old boys network" issue, not confidentiality as to the arbitration process

Confidentiality is very interesting topic. Some believe information that is known by more then two persons is difficult to keep confidential. I believe that the test for the breach are the damages. If there are no damages as a consequence of the breach of confidentiality then there are no remedies against the breach. I had a situation like this one where there was a divulsion of confidential information in the course of arbitration. The award from a previous arbitration between the same parties was intentionally disclosed by one of the parties. During the preliminary hearing the attorney for the aggrieved party kept arguing that the breach was harmful to them. When I pushed him to tell us what were the real damages he finally said: "well we were outraged!". I responded jokingly that I could give him a "hug" to cure the outrage and also stated that "no judge in this land" would give him relief in this case! the matter went to court in New Jersey and I was later informed through the court transcript and the opposing attorney that the judge told this attorney something to the effect that arbitrator Barakat had it right. Therefore, the confidentiality breach alone is not enough for obtaining relief. Real and quantifiable damages have to be proven for the relief to be ordered.

Judge Gerald Harris :

When parties freely enter into arbitration agreements the confidential nature of the proceedings is usually regarded as a desirable objective. It is only when the agreement is regarded as one of adhesion that the "secret " nature of proceedings becomes objectionable and such one-sided agreements should permit a public option.
I don't see how confidentiality impacts diversity in the selection of neutrals and I suspect that other factors play a much larger role in the selection process including, but not limited to, the make up of the panels from which choices are made.

Michael Orfield:

I am not quite sure from where comes the anti-arbitration bias. I appreciate that consumers may be put off by such issues as confidentiality and lack of ability to have class actions. But do they appreciate how streamlined the process can be in an effective arbitration? Do their attorneys help them appreciate how much more efficient and less expensive that a well run arbitration can be? That said, is it time to take a look at confidentiality and perhaps put the issue in the hands of the arbitrator? Perhaps the assumption can be that the matter is confidential unless one party makes a motion to the arbitrator to declare it non-confidential. What is the over arching argument anyway for confidentiality in the arbitration process? I really do like these round table discussions. They get me thinking about things I haven’t given much thought to lately.

William Pastor:

Anti-arbitration bias has existed for decades, although it may be more prevalent now. I don't think that the source is the secrecy, but rather the perception that juries are more generous with their awards. Simply put, some members of the public see an opportunity to sue as a windfall, like hitting the lottery. This of course ignores the fact that astronomical jury awards are often overturned by appellate courts.

The one observation I would add is that confidentiality appears to be disappearing, as people violate confidentiality agreements largely without consequences. I think that confidentiality is important to some parties, and the erosion of same will result in less settlements and more battles to the bitter end. Claimants may begin to question their aversion to confidentiality as that happens.


I don’t think the confidentiality attributes of arbitration contribute, materially, to the distrust that some segments of the public have toward mandatory arbitration. I think the distrust comes from not understanding the arbitration process … and to some degree that lack of understanding comes from a lack of diversity in the ranks of ADR neutrals. In other words, when rosters are largely comprised of people who don’t reflect the demographic makeup of the consumers and employees whose disputes come before them, skepticism of the process is often the result.

Based on my experience as a past chair of the ABA Dispute Resolution Section's Women in Dispute Resolution Committee and past member of the National Committee for Diversity in ADR, I have to say that I agree completely with the comments of Judge Peck.

I deal with consumer disputes every day and conference many cases involving them. I am talking hundreds if not thousands of cases. In my experience, there are occasions when the consumer wants to tell others what a "bad guy" the business party is. However, I explain to them that this is not the proper venue to do that, but there are other venues that are appropriate, such as the Better Business Bureau, etc., to make their concerns more widely known. I do not think that the lack of confidentiality is ever a deterrent in these cases. All the consumer wants is someone who will LISTEN and acknowledge that they understand their position. (Think "looping" in mediation terms). Diversity has little or nothing to do with it. I am a native New Yorker who has lived here my entire life, and I listen and can relate to most of the issues and problems that the consumer is relating, and the response made by the business party. What may be counterproductive and may breed contempt for the process, is an arbitrator who tells a consumer that he "could give him a "hug" to cure the outrage." Doing that will generate resentment for the process, even if said "jokingly," because these matters are very serious to the parties, and they want you as the arbitrator to take them equally as seriously. Just my .02 .


With regard to (a) there are certainly many people who look at arbitration agreements in the employment field with disdain because of the confidential nature of such proceedings. This disdain is due to many factors including a perception that those who seek action against their employers, which are frequently large corporations, are silenced because they cannot speak publicly. In turn, employers are spared public embarrassment or a tarnished reputation. Arbitration agreements in this sense may seem disproportionately advantageous to employers. Because of this, arbitration proceedings may appear as a sort of David v. Goliath battle encouraged by politicians who protect corporations at the expense of their employees. Such optics stoke feelings of injustice in much of the population, particularly in the Me Too era when sexual harassment claims against employers may go unnoticed because of the signing of arbitration agreements requiring confidentiality of the proceedings.

With regard to (b), it is certainly possible that confidentiality in arbitration proceedings contributes to a lack of diversity in the selection of ADR neutrals. Knowing that the proceedings will be confidential, parties may choose non-minority ADR neutrals due to intrinsic biases disfavorable toward minority ADR neutrals. This is particularly possible given the nature of today's business environment in which the majority of people making the decision of who to select as an ADR neutral are likely to be non-minorities themselves.

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This page contains a single entry from the blog posted on August 27, 2018 9:04 AM.

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