**GUIDE**

**TO**

**CONFIDENTIALITY**

**UNDER THE FEDERAL**

**ADMINISTRATIVE DISPUTE RESOLUTION ACT**

**ABA Ad Hoc Committee**

**on**

**Federal ADR Confidentiality**

**MARCH 2005**

**Co-Sponsors:**

**American Bar Association**

**Sections of**

**Administrative Law & Regulatory Practice,**

**Dispute Resolution, and**

**Public Contract Law**

**ABA AD HOC COMMITTEE ON FEDERAL ADR CONFIDENTIALITY**

# David Batson, Conflict Prevention and Resolution Center, U.S. Environmental Protection Agency

**Professor Phyllis Bernard**, Oklahoma City University School of Law 

**Honorable Ruth Burg**, Section of Public Contract Law

**Frank Carr**, Carr, Swanson, & Randolph

**Tom Coogan**, Office of Inspector General, U.S. Postal Service

# Helena Tavares Erickson, Senior Vice President, Research, Development, & Education, CPR Institute for Dispute Resolution

**Robert Fisher**, General Counsel, RESOLVE Inc.

**Howard Gadlin**, Ombudsman, National Institutes of Health

**Honorable Martin Harty**, Armed Services Board of Contract Appeals; Section of Public Contract Law

**Eileen Hoffmann**, Commissioner/Project Director, Federal Mediation and Conciliation Service

**Robert Jones**, Director, Florida Conflict Resolution Consortium 

# Deborah Kant, Senior Counsel, Office of Dispute Resolution, U.S. Department of Justice

**Alexandra Keith**, Office of Inspector General, Corporation for Public Broadcasting

**Joseph McDade**, Deputy General Counsel for Dispute Resolution, U.S. Air Force

**Leah Meltzer**, Deputy Dispute Resolution Specialist, Securities and Exchange Commission

**S. Pierre Paret**, Vice President, American Arbitration Association

**Peg Porter**, Director, Interagency Shared Neutrals Program (formerly)

**Charles Pou**, Charles Pou Dispute Resolution Services; Section of Administrative Law & Regulatory Practice

**Karen Powell**, Petrillo & Powell; Section of Dispute Resolution

**Lee Scharf,** Conflict Prevention and Resolution Center, U.S. Environmental Protection Agency

# Jeffrey Senger, Senior Counsel, Office of Dispute Resolution, U.S. Department of Justice

**Steven Shapiro**, Dispute Resolution Service, Federal Energy Regulatory Commission

**Michael Thompson**, Director, Iowa Mediation Service

**Ellen Wheeler**, General Counsel, U.S. Institute for Environmental Conflict Resolution

**Acknowledgments**

Three ABA Sections—Administrative Law & Regulatory Practice, Dispute Resolution, and Public Contract Law—formed an Ad Hoc Committee on Federal ADR Confidentiality in early 2001 to develop guidance on handling confidentiality concerns.  The ABA’s Ad Hoc Committee process brought together public and private sector ADR program managers, mediators, lawyers, personnel from offices of inspectors general, Department of Justice lawyers, and others.  Their charge was to develop a *Guide* that would: (1) stimulate progress in developing practical advice for handling information submitted in confidence in federal agency-related ADR proceedings, (2) offer analysis and tips to assist program administrators, neutrals, and others on dealing with confidentiality day-to-day, and (3) promote a consensus that will reduce future confidentiality breaches. 

Each Committee member participated in the Committee’s work as an individual, rather than as formal representative of any governmental or other entity.  Nevertheless, all members were asked to consult on relevant issues with public and private groups and others outside the Committee who shared their interests.  Most did so.  Members made all decisions by consensus: i.e., none expressed dissent.   While each of the nearly two dozen members had the option to append written comments concerning any serious reservations, unanimity among Committee members was in fact reached on the entire *Guide*. 

This *Guide* reflects a consistent commitment to the ADR Act’s confidentiality tenets and goals, as well as policies adopted by the ABA in 1988****and 1995 and the Administrative Conference of the U.S. between 1986 and 1995.  The ABA, with ACUS, played a key role in the Act’s passage.  The Administrative Law Section has long been active in encouraging appropriate ADR use in government, and was deeply engaged on that Section’s behalf in the negotiations leading to the Act’s initial passage and permanent reauthorization.  Public Contract Law’s recent publication *An Ounce of Prevention: Best Practices in Dispute Avoidance for Government Contracting*was an invaluable contribution.  Dispute Resolution has encouraged and aided ADR use in many venues, and urged agencies repeatedly to accord ADR confidentiality greater attention.  

The *Guide* also seeks to build on the work of the Federal ADR Council and the Federal Interagency Alternative Dispute Resolution Working Group (IADRWG).  In late 2000, the Council—whose members are drawn from federal agencies active in ADR—issued an initial guidance document entitled *Confidentiality in Federal Alternative Dispute Resolution Programs.***That document defined itself as an initial effort, and recognized that other interests, beyond federal agencies, have a stake in federal ADR activities.  

Special recognition is paid to Charles Pou, who was the inspiration and driving force behind this project; to Phil Harter of the University of Missouri School of Law for his numerous contributions; and to the Steering Committee comprised of Committee Co-Chairs Frank Carr and Steve Shapiro, Peg Porter, Charles Pou, and Karen Powell. 

Recognition is also given to the many individuals who had a hand in developing this document—reviewing draft after draft and weathering discussions on party confidentiality and investigative access and many other difficult conversations.  Thanks to all.

**_________________________________________________________________________**

**Some Typical Questions the *Guide* Addresses**

When I took Basic Mediation Skills training, I was told that mediation is a confidential process.  What does that mean?  *A federal collateral-duty mediator*

We maintain records on anyone who comes to our office about an EEO matter.  This is true for individuals who choose mediation as well as those who pursue a formal complaint.  Can we continue to do business this way?  *A federal EEO program manager*

I keep a file on each case I mediate for the federal government.  I consider these my personal files.  Could I be compelled to turn them over to a federal agency?  *A mediator from the private sector***

**_________________________________________________________________________**

**GUIDE TO CONFIDENTIALITY**

**UNDER**

**THE FEDERAL ADMINISTRATIVE DISPUTE RESOLUTION ACT**

**TABLE OF CONTENTS**

**Acknowledgments**

**1.Introduction and Summary**

Confidentiality Concerns8

The *Guide*’s Goals9

Key Advice10

**2.Overview of Confidentiality under the Federal**

**Administrative Dispute Resolution Act**

# Why Confidentiality Matters in Alternative Dispute Resolution15

The Federal ADR Act: Balancing Confidentiality and Accountability16

The Legal and Administrative Framework for Federal ADR17

The ADR Act’s Coverage22

Definition of “Neutrals”24

**3.Administrative Neutrals**

Administrative Neutrals’ Program Functions and Activities  26

Administrative Neutrals’ Involvement at Multiple Stages of a DR Proceeding  28

##### Challenges Involving Administrative Neutrals’ Communications 30

##### Intake: A Closer Look  32

Confidentiality Agreements34

# Practical Guidance for ADR Programs and Administrative Neutrals34

**4.Session Neutrals**

Session Neutrals and Their Roles37

Legal, Ethical, and Practical Duties of the Session Neutral38

Why Session Neutrals and Parties Must Understand Confidentiality in Advance40

Dealing with Potential Exceptions to the Disclosure Prohibition 41 

# Practical Guidance for ADR Neutrals and Programs Using In-House Neutrals45

**5.Parties and Confidentiality Agreements**

Parties’ Expectations of Confidentiality48

# Confidentiality Agreements50

Mediation Techniques54

Waiving Confidentiality Protections55

**6.Confidentiality in Particular Government ADR Situations**

Multi-Party ADR56

Ombuds Programs59

Matters before Administrative Tribunals63

Settlement Approvals67

**7.Confidentiality and Agency Record-Keeping**

Introduction and Overview of Federal Records Act Requirements 71

Applicability of Federal Records Act to ADR Records72

Practical Concerns for Confidentiality73

Recommended Goals and Strategy 73

**8.        Evaluating ADR Programs, Processes, and Neutrals**

Overview75 

Legal Context76

Considering Confidentiality in Performing an Evaluation77

**9.Handling Access Requests**

Handling Access Requests under the ADR Act80

Agency Procedures, Guidance, and Agreements85

**10.Conclusion**

**Appendices**

1.  Federal ADR: A Glossary91

2.  Administrative Dispute Resolution Act, 5 U.S.C. §§571, 57494

3.  Possible Access Requests Model Procedure97

4.  Federal ADR Confidentiality Guidance Documents99

**Chapter 1**

**The *Guide*:**

**An Introduction**

**and**

**Summary**

Confidentiality Concerns

The *Guide*’s Goals

Key Advice

**Confidentiality Concerns**

As the drafters of the Administrative Dispute Resolution Act (5 U.S.C. §§571-584) (see Appendix 2 for relevant sections of the Act) explicitly recognized, protecting sensitive dispute resolution (DR) communications is critical to successful agency use of alternative means of dispute resolution (ADR).   Confidentiality enhances participants' frank and open communications in, and effective use of, all of these ADR processes.

Parties, program administrators, mediators, ombuds, and others who engage in activities under the Administrative Dispute Resolution Act will need an adequate understanding of the confidentiality framework within which they will be working.  In particular, they must be aware of the legal, practical, and ethical ramifications and limitations of ADR confidentiality.  They will also benefit from having a good sense as to how the Administrative Dispute Resolution Act (ADR Act) seeks to strike a balance between (1) the confidentiality necessary for sensitive agency negotiations to succeed and (2) open government and oversight needs that relate to decision-making affecting the public welfare.  

Moreover, the extension of ADR into new governmental arenas is beginning to highlight striking confidentiality dilemmas, e.g., government employees serving as collateral duty neutrals, activities of government lawyer-mediators, duties of the growing number of provider organizations in government, and mediation by settlement judges within agencies.  As a result:

· Some neutrals fail to communicate real options—and real limits—that parties need to be aware of (such as by saying, "Everything will be confidential.")

· Others make unrealistic commitments. ("Whatever is said in this mediation room stays here.")

· A few inadvertently breach other participants' reasonable expectations.  

· Occasional outside investigative, oversight, or other entities believe that their legislative mandate overrides confidentiality protections established for communications in ADR. 

Parties in government ADR thus are sometimes surprised to learn that disclosures they considered protected turn out *not* to be, producing a chilling effect on the very premise of processes founded on "open and frank" discussion.  Disclosure can produce a predictably negative impact on participants' views of (and potential participants' willingness to trust future disputes to) ADR processes and create disparate impacts on unsophisticated participants.

In developing this *Guide*, the ABA Ad Hoc Committee sought to develop a consensus that includes representatives from the three participating ABA Sections, the Federal Government, and the private sector.

**The *Guide*’s Goals**

This *Guide* seeks to offer helpful analysis and practical advice for neutrals, program administrators, and other ADR participants on handling confidentiality concerns.   In developing it, the ABA Ad Hoc Committee has sought to:

· Build on the earlier federal guidance (see Appendix 4), and complement the Federal ADR Council's recently developed ADR confidentiality guidance for federal workplace ADR program administrators (see Appendix 4),

· Stimulate thinking about good practice in dealing with confidentiality in a manner that builds on the experience of program administrators and other informed perspectives, and

· Promote development of a consensus among private and public experts and other stakeholders that will reduce concerns over unwarranted breaches of confidentiality. 

In particular the ABA’s Ad Hoc Committee on Federal ADR Confidentiality seeks to promote consistent and thoughtful practice concerning confidentiality in federal ADR that is based upon an understanding of participants' interests, rights, duties, and options.  As a practical matter, this requires neutrals and administrators in federal ADR to possess a basic grasp of applicable legal standards, and to engage in accurate disclosure, consistent behavior, and good practice.  To this end, the *Guide* suggests good practices for: 

· Setting participants' expectations early on (by, for instance, discussing at the beginning of an intake, convening, or face-to-face conflict resolution session whether the process will be confidential, and to what extent)

· Adopting acceptable confidentiality ground rules that take into account legal considerations related to federal conflict resolution processes, as well as the needs of parties in a specific case

· Creating checklists, models, and opportunities for program employees, neutrals, and parties to consider confidentiality issues beforehand and to obtain practical advice on dealing with these issues in "real time”

· Implementing intake, convening, document handling, evaluation, quality assurance, training, and other procedures that build on the experience of program administrators (state, federal, and private sector) and consistently reflect a commitment to confidentiality principles and policies

· Consistently handling demands or requests for potentially confidential information according to a practical, legally valid policy and a process that balances possible  divergent needs and interests

· Being constantly mindful of the consequences if information gets into the wrong hands or remarks get into the wrong ears

**Key Advice**

The *Guide* reflects and offers advice on effectuating the following basic principles, which should govern treatment of all communications in any dispute resolution proceeding conducted under the federal ADR Act:

***General tenets.***

· ADR programs should seek maximum protection of dispute resolution communications, consistent with applicable statutes.  This will promote the integrity of ADR processes and permit parties to address sensitive subjects that they might be unwilling to discuss publicly, explore their interests and settlement alternatives candidly, and develop creative solutions. 

· ADR programs and neutrals should seek to avoid any confidentiality disclosures or surprises for any party or neutral.  In particular, no unanticipated disclosures should occur that substantially disadvantage any participant.

· In developing procedures, policies, and materials regarding confidentiality, agencies should remember that the ADR Act has broad applicability to many diverse ADR processes in an agency-level dispute relating to a federal program, and thus can affect a number of players.  These include mediators, ombuds, other internal agency neutrals (e.g., convenors and intake personnel), external neutrals, internal and external program administrators, private and public parties, and others involved in the administrative resolution of a controversy.  

· The *Guide* seeks to recognize that it will often be important to remember that these players may work under a slightly different set of expectations in different settings.  It offers analysis and advice for addressing some of these concerns as regards ombuds offices, multi-party ADR processes, and administrative tribunals.

***Administrative and session neutrals.***

· All neutrals serving in a proceeding under the federal ADR Act, including those who are employed by the federal government and those from the private sector, should be able to explain applicable confidentiality standards clearly and should establish appropriate expectations that promote sensitive handling of ADR communications.  

· Under the ADR Act’s definitions, ADR program administrators and intake staff may serve as “neutrals,” beginning during the early, pre-session phase of an ADR process, when they act specifically to assist a party or potential party desiring to resolve a dispute relating to a federal program.  Thus program personnel who engage in these activities should understand and abide by the ADR Act’s prohibition against disclosure (subject to specified confidentiality exceptions).

· Agencies should formally designate personnel who serve as ADR program administrators as “neutrals,” in order to prevent roles from becoming blurred and to avoid difficulty in ascertaining the point at which an individual’s discussions about whether and how to employ an ADR process triggers the Act’s protections. 

· Agencies should employ training materials and focused continuing education to ensure that in-house and other administrative and session neutrals understand the ADR Act’s confidentiality provisions.

· Federal employees who serve as administrative or session neutrals may occasionally be subject to ethical, record-keeping, and disclosure duties that do not generally apply to private sector counterparts.  Agencies should clearly alert parties in advance to any such duties to avoid surprise.

· All neutrals’ and parties’ knowing, voluntary, and written consent in advance should be required in order to depart in any way from the ADR Act’s standards governing neutral confidentiality.

***Parties and confidentiality agreements.***

· Since confidentiality needs may vary with the case and issues involved, parties should consider preparing confidentiality agreements that clarify their expectations for a particular case.  For example, while the ADR Act excludes from its general prohibition against party disclosures any dispute resolution communication by a party that is available to all parties (e.g., joint session communications), parties may agree among themselves not to disclose voluntarily such inter-party communications.  

· Parties should understand that, while an agreement enhancing protection of DR communications may bind the signatories, it may not bind third parties.  

· All parties’ knowing, voluntary, and written consent in advance should be required in order to depart in any way from the ADR Act’s standards governing party confidentiality.

***Explaining confidentiality accurately.***

· Clear, understandable explanations of confidentiality should be given to participants at the outset of a proceeding; these should provide accurate expectations that accord with the ADR Act’s prohibition against voluntary or compulsory disclosure and its specified exceptions. 

· Agreements to mediate (or to engage in other ADR procedures) should not overstate the degree to which communications may be protected, and should discuss explicitly the possible need to disclose details of a proposed settlement to superiors or other reviewers in order to obtain approval.

***Record-keeping and evaluation.***

· Some dispute resolution communications that are confidential under the ADR Act may nonetheless be official agency records subject to record-keeping mandates.  For those documents, careful attention to record-keeping will be important, especially given that the expanded use of electronic communications has complicated protection of confidentiality and privacy.

· Agencies should take care to label DR records as confidential, limit access to those records, and employ record-keeping and evaluation procedures that minimize the risk that sensitive data will be disclosed.  

***Handling access requests.***

· Programs should set forth, and consistently follow, standards and procedures for handling any and all requests for access to sensitive data relating to DR proceedings.  These standards should: (1) establish a presumptive no-disclosure policy, as described in Chapter 9; (2) set forth in advance a procedure for an objective, impartial balancing in full accordance with the ADR Act’s mandated procedure for neutrals who receive a request for disclosure (including notice to the parties before making any disclosure); and (3) encourage agency program administrators and neutrals to deal with requesters in a thoughtful and respectful manner by attempting to educate them about the ADR Act’s disclosure prohibition.

· Administrative, session, and convening neutrals should not be required, or permitted, to decide on their own whether to disclose sensitive DR communications or choose between arguably conflicting duties that affect confidential treatment of dispute resolution communications.  Permitting such decisions may subject neutrals and programs to potential liability or grievances, and makes impossible the principled weighing process contemplated by the ADR Act. 

· Agencies should require requesters to regard disclosure of a DR communication by an administrative or session neutral as a final resort; they should seek to ensure that any neutral they employ will not disclose such a communication except where required by law and no other person is reasonably available to disclose the communication.

· Any conflicts arising between the confidentiality standards or procedures of the ADR Act and other statutory, investigative, or administrative needs (e.g., statutes that require disclosure of information by federal employees) should be addressed in a way that harmonizes ADR processes’ goals and integrity and other missions. 

***Implementing this advice.***  Federal ADR program managers and neutrals should deal systematically, thoughtfully, and comprehensively with the ADR Act’s requirements for protecting dispute resolution communications.  If they follow the above recommendations, and if they ensure that their clients and others with whom they deal have a basic understanding of confidentiality issues, they will promote success in their own ADR processes and assure the credibility of Federal Government ADR generally. 

**Chapter 2**

**Overview of**

**Confidentiality**

**under the**

**Federal Administrative**

**Dispute Resolution Act**

# Why Confidentiality Matters in ADR

*How ADR works*

*Selected authorities recognizing the importance of confidentiality*

*How confidentiality promotes resolution*

*Ethical duties regarding confidentiality*

The Federal ADR Act: Balancing Confidentiality and Accountability

*Congress’ rationale*

*An overview of the ADR Act’s approach*

The Legal and Administrative Framework for Federal ADR

*ADR and administrative law*

*What communications are protected?*

*Exceptions to confidentiality*

*Disclosure procedure*

The ADR Act’s Coverage

*Applicable definitions*

*Breadth of the Act’s coverage*

*Implications of the Act’s breadth*

Definition of “Neutrals”

*Types of "neutrals" in federal ADR*

*Session neutrals*

*Administrative neutrals*

# Why Confidentiality Matters in Alternative Dispute Resolution

**How ADR works.**  Alternative dispute resolution techniques, including mediation, typically employ an impartial third party to aid the disputing parties reach agreement.  An ADR neutral (such as a mediator) typically promotes a candid exchange regarding prior events and the parties’ perceptions and attitudes, and encourages parties to think creatively about ways to resolve their differences.  The impartial third party (or “neutral”) (see Appendix 1 for a glossary defining many of the terms employed in the *Guide*) may be able to improve the negotiations and enhance the possibility of agreement by holding both joint sessions among the parties and separate, confidential meetings with each party (“caucuses”) where they are able to discuss candidly their positions and consider alternatives.  The neutral, without disclosing any confidences, can then use the confidential information to help the parties shape the negotiations to reach settlement more effectively. 

**Selected authorities recognizing the importance of confidentiality.**  The critical importance of confidentiality in ADR is well recognized.  Many of the benefits of ADR can be realized only if the proceedings are confidential.  Congress, and indeed most people knowledgeable about ADR processes, have found that a frank exchange is achieved only if the participants can expect that what is said in the process will not be used to their detriment.   The IADRWG guidance, for instance, states that confidentiality is “a critical component of a successful ADR process,” and points out that:

[G]uarantees of confidentiality allow parties to freely engage in candid, informal discussions of their interests in order to reach the best possible settlement of their claims.  A promise of confidentiality allows parties to speak openly without fear that statements made during an ADR process will be used against them later.

**How confidentiality promotes resolution.** Confidentiality enables parties in ADR to focus on their interests, as opposed to positions.  It assures parties that they may raise sensitive issues and discuss creative ideas and solutions that they would be unwilling to discuss publicly.  A party may be willing to accept something less or different than he is advocating formally, but could fear that revealing that willingness in an assisted negotiation would be used to his harm in the event that negotiations do not succeed completely.  Without assurance that their confidences will not be disclosed, the parties would be far less willing to discuss freely their interests and possible settlements.

Disclosing the neutral’s private recollections or documents could be misconstrued as showing a bias against some party or interest.  It could affect his or her perceived neutrality, seriously disadvantage a party, and even inhibit future participation in ADR generally.  The private notes of the neutral—which are produced solely to assist the neutral or parties in the negotiation process—could be misconstrued as showing a bias against some party or interest, and their revelation could harm a party.  Testimony by a neutral would destroy his or her neutrality and could have a negative impact on one or more parties.    If a neutral were to give access to personal notes or documents created for purposes of ADR, it would lead to a chilling effect on the very premise of a neutral process founded on "open and frank" discussion.  It would also undermine the significant public policy in favor of resolving issues through settlement.  Public confidence in ADR makes it important that parties have confidence that the neutral will not take sides or disclose their statements, particularly in the context of other investigations or judicial processes. 

**Ethical duties regarding confidentiality.** In addition, the ethical obligations imposed upon ADR neutrals also mandate confidentiality.  For instance, the Standards of Conduct for Mediators, which were adopted in 1994 by the American Arbitration Association, the American Bar Association Section of Dispute Resolution, and the Society of Professionals in Dispute Resolution, require that a mediator keep confidential any matter that a party expects to be confidential unless given permission by all parties or unless required by law or other public policy to disclose such information.  

**The Federal ADR Act: Balancing Confidentiality and Accountability**

**Congress’ rationale.**Congress enacted the ADR Act to provide explicit confidentiality protection for mediation, facilitation and other ADR processes in the Administrative Dispute Resolution Act.  Congress recognized that parties would be less forthcoming if they knew disclosure to be a significant possibility, and that even one or two cases where expectations of confidentiality are undermined could precipitate a damaging loss of trust in the confidentiality of federal ADR processes as a whole.  The ADR Act’s language, its legislative history, and various statements of its sponsors express a policy in favor of protecting “dispute resolution communications,” as defined by the Act.

The Act recognizes that, while decisions affecting the public welfare ought to be made in the open and must be subject to scrutiny, confidentiality is necessary if negotiations are to achieve resolution of sensitive and highly charged issues.   The Administrative Dispute Resolution Act generally seeks to strike the appropriate balance between open government, oversight, and confidentiality.  In it, Congress made clear the standards and procedures governing issues of confidentiality in agency-level ADR.

**An overview of the ADR Act’s approach.**Unlike many state confidentiality statutes, the ADR Act does not provide a mere privilege or general endorsement of “confidentiality.”  It prohibits disclosure.   Absent authorization under a specified statutory exception, a neutral or party is precluded by the Act from voluntarily making a disclosure of confidential information or being required to make one.  By enumerating these exceptions to confidentiality, Congress explicitly balanced the need for confidentiality in dispute resolution proceedings involving federal agencies and the need for disclosure in certain limited circumstances.  

In the ADR Act, it established a detailed confidentiality section, explicitly stating its intent to give parties in federally-related ADR proceedings assurance that their dispute resolution communications would generally be “immune from discovery.”  To enhance predictability, Congress went on to define these protections in detail.  In addition to forbidding neutrals from disclosing such communications, or being “required to dis​close” them, the Act also prohibits party disclosure, though subject to a broader set of exceptions.  The Act (Section 574(e)) re​quires prior notice to parties in any case where arguably protected data are sought, an opportunity for the parties or neutral to contest disclosure before a federal court, and a decision  on the matter by the court reacheINCLUDE C:\\ADRDOCS\\CONCOMT1.WPD \* MERGEFORMAT d under a balancing test based on specific statutory criteria.   

**The Legal and Administrative Framework for Federal ADR**

**ADR and administrative law.**  Agencies’ authority to use ADR, negotiation, and other decision-making processes to resolve disputes is nothing new.  In 1947, the *Attorney General’s Manual on the Administrative Procedure Act* described informal procedures as “truly the lifeblood of the administrative process.”  

In recognition of this fact, longstanding tenets of federal administrative law have afforded agencies great discretion in carrying out their statutory missions.  This extends explicitly to a variety of activities: deciding whether to make law via rulemaking, adjudication, or other means; determining whether and how to enforce these laws; and bringing litigation or other proceedings, deciding on appropriate relief, settling cases, and structuring settlement processes.  

Congress intentionally left agencies free to develop the precise manner by which they implement the opportunity for settlement.  Reviewing courts have consistently recognized agencies’ inherent discretion to take actions necessary to conduct such activities.  Courts have also accorded agencies’ enforcement and procedural choices a high degree of deference. 

Before Congress enacted the ADR Act, many agencies exercised these inherent powers by entering into agreements to conduct minitrials, mediations, negotiated rulemakings, and other assisted resolution processes, as well as to negotiate administrative and court settlements without assistance.  Citing the benefits of ADR techniques developed in the private sector, Congress unambiguously encouraged agencies in 1990 to develop and refine these "voluntary procedures which supplement rather than limit other available DR procedures."  To promote more "creative, efficient, sensible outcomes," the ADR Act built upon this preexisting history of flexible practice to:  

· extend the above framework to eliminate any uncertainty as to agency authority to fashion alternate, consensual resolution procedures involving neutral third parties,

· afford agencies broad, virtually unreviewable discretion to choose whether and how to employ these ADR processes to resolve controversies,

· offer agencies guidance as to how to proceed regarding several novel policy questions raised by the Act, e.g., case criteria for employing ADR, new authority for binding arbitration procedures, enhanced confidentiality protections, neutrals duties and services, judicial review, relation to other statutes, and similar matters, and

· mandate designation of: (1) an individual to serve as Dispute Resolution Specialist in each agency and (2) an interagency group, headed by the Attorney General, to assist and advise agencies on implementing ADR.  

The Administrative Dispute Resolution Act establishes a statutory framework for, and encourages agencies to employ, federal agency ADR (as discussed below).  Regarding confidentiality, the Act generally provides that communications (including a neutral’s notes and documents prepared for the proceedings) between a third-party neutral and the parties to a dispute resolution proceeding must be kept confidential by the neutral and the parties, except in certain specified situations. (Section 574(a)).  It also places some limits on disclosure by parties to ADR proceedings. (Section 574(b)).

**What communications are protected?**  Section 4 of the ADR Act governs confidentiality, and in 5 U.S.C. §574, it fosters agency use of ADR by ensuring appropriate protection of parties' and neutrals' "dispute resolution communication(s)."  In legislating, Congress defined these protections in detail.  The Act forbids neutrals to disclose such communications, and also states that they shall not "be required to disclose" such communications except in narrowly-defined circumstances.  Such circumstances include a determination by a court that disclosure is, on balance,  necessary to prevent a manifest injustice, help establish a violation of law or prevent harm to the public health or safety.  (Section 574(a)(4)).

Protected communications involving a neutral include information provided “in confidence” to the neutral, i.e., information provided either with the expressed intent of the source that it not be disclosed or under circumstances that would create the reasonable expectation on behalf of the source that the information will not be disclosed (e.g., the verbal exchange of information in caucus between a party and the neutral).  They also include a “dispute resolution communication,” which is any verbal exchange, written communication, or conduct that is generated by the neutral, the parties, or a non-party participant for the purpose of a settlement proceeding, including memoranda, notes, and work product. (Section 571(5)).  Section 574 covers documents that are created specifically for the negotiations and that are furnished in confidence to the neutral by a participant in the negotiation.

The parties may agree to alternative confidential protections for disclosures by themselves or by a neutral, *provided* (in the case of neutral confidentiality) they inform the neutral before the commencement of the dispute resolution proceeding of any proposed modifications.  If the parties do not so inform the neutral, 5 U.S.C. §574(a) applies.

**Exceptions to confidentiality.**  The ADR Act's exceptions (Sections 574(a) and (b)) include these common sense situations:

· cases in which a communication has already been made public,

· where all parties and the neutral agree on disclosure, 

· where a court finds a need for disclosure of protected information—that, on balance, outweighs the need for integrity in ADR processes—to prevent harm to the public health and welfare, prevent a manifest injustice, or reveal a violation of law, and 

· those few situations where a statute (but not an agency's administrative regulation) specifically requires that information be made public—e.g., the Clean Air Act, which states that certain records, reports or information obtained from regulated entities “shall be made available to the public.”

The ADR Act expressly permits the parties and the neutral to vary the confidentiality provisions concerning neutrals if all parties and the neutral agree to alternate provisions in advance; such an agreement cannot provide for less disclosure under FOIA than the ADR Act’s basic provisions do.

Besides the above exceptions, which cover both neutrals and parties, a few added exceptions apply to party disclosures.  (Section 574(b)).  In particular, neutrals and parties who are new to federal government ADR may be surprised to learn that, while the ADR Act generally prohibits a party's disclosure of "dispute resolution communications," section 574(b)(7) creates an exception permitting parties to disclose documents and oral statements *provided to or available to all parties*—for example communications in a joint mediation session.  This “made available to all parties” exception may have some detrimental impacts, compared to the protections with which some parties in non-governmental settings are familiar.  These harms could include reduced candor in joint sessions, over-emphasis on "private caucus" or evaluative styles of ADR, and confusion or detrimental surprise for unsophisticated participants.  A common practice is to draft mediation agreements in which parties agree not to disclose information unless it is available to all parties in the proceeding.  (See Chapter 5 for a more extensive discussion of parties’ authority to agree to confidentiality terms that differ from the default provisions in section 574(b)) and the effect of such agreements.)

**Disclosure procedure.**  As stated, neutrals are generally prohibited from any disclosure of DR communications.  Whenever disclosures are sought formally, the ADR Act re​quires prior notice to parties, an opportunity to contest disclosure, and judicial balancing subject to stat​ed criteria.  (Section 574(e)).  A judge who is asked to order disclosure of confidential communications would be expected to be assured that parties have been given a chance to object to disclosure and then undertake a careful balancing using the Act’s criteria.  Disclosure or testimony can be ordered when the court finds the magnitude in a particular case sufficient to outweigh the integrity of dispute resolution, in general.

Neutrals who are requested to disclose protected documents must make an effort to notify the parties of demands for disclosure, and a party that does not offer to defend a neutral’s refusal to disclose is considered to have waived any objection.  (Section 574(e)).

The ADR Act explicitly gives agencies broad discretion as to when and how to use ADR methods, as well as whether to proceed under its terms or, alternately, any other statutory authority it may possess.  (e.g., Sections 572(a) and (c))  Where another statute authorizing a specific agency use of ADR mandates confidentiality provisions that differ from the ADR Act's standards and structure, the latter may not apply.

**The ADR Act’s Coverage**

**Applicable definitions.**  The ADR Act applies if an “ADR process” is employed to address an "issue in controversy" relating to a federal "administrative program."   The Act defines these terms quite broadly.  An "issue in controversy" is "an issue which is material to a decision concerning an administrative program of an agency and with which there is disagreement."  (Section 571(8)).  The disagreement may be between either (1) an agency and persons who would be substantially affected by the decision or (2) private or other persons who would be substantially affected. 

**Breadth of the Act’s coverage.****The ADR Act governs ADR use in disputes arising from a federal administrative program.  The provisions of the ADR Act may apply regardless of whether the agency is a party to the dispute or whether the mediator comes from government.  The dispute resolution program that provides mediation services need not be housed in a federal entity to trigger the Act, but could include a private sector or state-sponsored agricultural or other mediation program that handles disputes involving federal programs.  

A case is likely to fall under the Act if:

· a federal agency is a party,

· an agency offers or authorizes an ADR process that could resolve an issue in controversy relating to any of its administrative programs or that could ultimately be decided by an agency under one of those programs,

· the case relates directly to activities of a federal agency or others acting under a federal program, or

· funding from a federal contract or grant program is provided expressly to conduct or promote an ADR program.

Thus, when an agency is a party in an administrative level dispute, either formally or informally, the Act presumably applies.  In addition, the Act applies in a broad range of federal agency regulatory activity involving disputes to which the agency may not itself be a party.  For example, the ADR Act applies when agency regulation of a subject-area gives rise to disputes among private parties or other non-federal entities and provides for a dispute resolution process.  The Act thus covers DR proceedings involving agency workplace and EEO cases, private sector EEO disputes, contract claims and bid protests, licensing disputes, environmental conflicts, and hundreds of other disputes relating to federal agency programs that may culminate in an agency action.

**Implications of the Act’s breadth.**  The ADR Act’s coverage can affect a number of players—internal agency neutrals, external neutrals, internal and external program administrators, and others involved in the administrative resolution of a controversy relating to a federal program.  In developing materials regarding confidentiality, it can be important to recognize that each set of players may work under a slightly different set of expectations.  While internal neutrals within the federal sector may expect some consistency, permutations exist among departments and even within departments.  External neutrals will include those who provide dispute resolution services on an individual basis, and provider organizations that work under federal contracts, grants, or laws.  They will experience the same permutations as internal agency neutrals, perhaps to a greater degree.  

This *Guide* focuses on dispute resolution proceedings used by agencies at the administrative level (including contractual matters), rather than on lawsuits brought in federal court.  Government ADR at the administrative level shares commonalities with government ADR in federal courts, but there are also differences.  

**Definition of “Neutrals”**

**Types of "neutrals" in federal ADR.**Whether or not someone is serving as a "neutral" under the ADR Act at a given time will depend on the specific activity being performed.  "Neutral" activities include any function that specifically assists parties to resolve a particular governmental dispute.  Neutrals perform a range of tasks, which often include:

· acting to mediate, facilitate, find facts, arbitrate, or otherwise serve in party-to-party sessions in a specific application; 

· performing intake and advising potential parties about whether to employ a DR process and how to structure it; 

· identifying all necessary parties and bringing them to the table; 

· helping a disputant select an arbitrator, mediator, or other session neutral; 

· setting up and presiding over parties' face-to-face sessions; 

· obtaining and finalizing party agreements; and 

· securing a written agreement with necessary signatures.

There are two basic categories of federal ADR neutrals, each of which will perform a combination of the above jobs; while the roles often overlap and may vary among ADR programs, the *Guide* differentiates between: (1) those who preside over party-to-party sessions in a specific application of ADR (e.g., mediator, facilitator, fact finder) and work with parties between sessions to explore settlement options; and (2) those who administer an ADR program or assist with commencing an ADR process but who do not participate in the actual dispute resolution session between the parties (e.g., intake staff, roster managers, convening neutrals).  For consistency, this *Guide* refers to the first group as *session neutrals* and the second group as *administrative neutrals*or*program neutrals.*  Within these two broad categories of neutrals there are many types of ADR programs, practitioners, and styles of practice.

**Session neutrals.**These include:

· Federal employees.  These may be full-time neutrals, such as those at the Department of Justice's Community Relations Service, or part-time.  Part-time neutrals (primarily mediators), serve as neutrals during regular working hours with supervisory approval.  These individuals may serve as a neutral for their own or another agency.  Many part-time federal neutrals are known colloquially as "collateral duty" neutrals, since this activity usually is collateral to their primary work duties. 

· Private sector neutrals.  These are not employees of the federal government.  They may be volunteers, or paid professionals, or others whose services are secured through contractual or other mechanisms.

**Administrative neutrals.**These “administrative neutrals” include ADR program managers, roster managers, and convenors, who fulfill many functions, ranging from technical assistance to record keeping.  They may reside inside or outside a federal agency.

· They may be full-time or part-time in their ADR function.  Whether or not they are serving as a "neutral" under the ADR Act at a given time will depend on the specific activity involved.  

· These persons are considered neutrals under the ADR Act whenever they are carrying out functions that aid parties to resolve specific governmental disputes and thus neutrality and confidentiality become important.

· Types of administrative or program functions where neutrality attaches include performing intake where the potential use of ADR is explored, handling session arrangements, identifying parties, locating and obtaining party agreement on potential neutrals, and securing necessary signatures to implement a written agreement.

**Chapter 3**

**Administrative**

**Neutrals**

Administrative Neutrals’ Program Functions and Activities  

Administrative Neutrals’ Involvement at Multiple Stages of a Dispute Resolution Proceeding  

##### Challenges Involving an Administrative Neutral’s Communications Within and Among Agencies

*Approaches to administering agency ADR use*

*The expanded use of electronic communication*

#### Intake: A Closer Look  

*Early-stage activities defined*

*Initial contacts in employment disputes*

*Initial contacts in contract disputes*

Confidentiality Agreements

# Practical Guidance for ADR Programs and Administrative Neutrals

*Promoting confidentiality systematically*

*Treating sensitive communications as confidential day-to-day*

**Administrative Neutrals’ Program Functions and Activities**

Dispute resolution provider organizations that manage or administer dispute resolution services—i.e., entities or individuals who serve as ADR "middlemen"—play a key role in most dispute resolution proceedings.  They may be private or public entities (e.g., courts, government agencies, and non-profit entities) that provide services, including roster creation and management, referral of neutrals, administration and management of processes, and similar conflict management activities. 

At various stages in a proceeding, administrators in these provider organizations perform a range of different functions that can be critical to the program’s (and a specific proceeding’s) ultimate success.  During the early stage, a provider program administrator may shift toward a more active role by imperceptible degrees: a party inquiry may lead to discussions about the party’s situation that help the administrator clarify needs, select the right process, and obtain effective session neutral services.  Some users may find it natural to seek a program administrator’s views on individual neutrals’ styles, experience, strengths and weaknesses, or discuss session neutrals whose specific aptitudes or experience may make them especially useful.  Many knowledgeable persons see great value added by administrators’ provision of case-specific advisory assistance, and point out that such activity, if well handled, can significantly improve a program’s effectiveness and acceptability. 

While ADR provider programs range greatly in their contexts, purposes, and operating procedures, these informal contacts, advice-giving, and assessment tasks may include:

· Explaining ADR as an option to potential users

· Handling intake of disputes that may be resolved by a dispute resolution proceeding 

· Convening or assessing one or more ADR processes to assist in resolving specific conflicts

· Managing a roster of session neutrals

· Helping parties select, or selecting, session neutrals to assist in resolution efforts

· Arranging an initial mediation session

· Consulting with session neutrals who provide ADR services to parties

· Providing appropriate information about the status of the program or its cases

· Evaluating services and ADR program quality (see Chapter 8)

· Collecting and managing data on the use of ADR

· Maintaining secure files for sensitive records (see Chapter 7)

· Educating parties and office personnel about ADR processes

· Managing program personnel and office resources

Many of these administrative activities occur prior or subsequent to the parties’ actual substantive negotiations during a mediation or other ADR session.  These activities are important, and many of them require frank discussions involving sensitive information.  Program administrative staff should understand the significance of confidentiality as part of acting professionally and knowledgeably as they carry out these roles, especially since they can play a vital initial role in establishing reasonable expectations and enhancing or diminishing the party trust that can crucially impact ADR processes’ effectiveness.

**Administrative Neutrals’ Involvement at Multiple Stages of a Dispute Resolution Proceeding**

Under the ADR Act, a “DR proceeding” may commence well before the parties meet in a negotiation session, and will include many (though not all) of the activities listed above.  Early communications with program staff are often important in helping parties decide whether to choose an ADR process and how best to employ the one selected in that case.  Under the ADR Act, an ADR program’s administrative staff member who acts specifically to assist a party or potential party wishing to resolve a dispute relating to a federal program is acting as a “neutral” under the ADR Act.  He or she has as much responsibility for protecting communications as a session neutral in a face-to-face session involving parties. 

To understand when and how to protect confidentiality while carrying out these functions, administrators should have a thorough understanding of the ADR Act’s framework for restricting disclosure of verbal and written DR communications at all stages of a proceeding.  The following is a discussion of confidentiality issues related to informal contacts and initial phases, and recommendations to assure sound practice by increasing administrators’ awareness of confidentiality issues.     

The protected activities that administrative neutrals may undertake in aid of resolution include:

· Receiving and recording party information about a dispute as part of an intake process for ADR services

· Advising parties to help them determine whether to use ADR and what form of ADR best suits their needs 

· Helping parties determine the nature and structure of an ADR process and get the process started

· Working with parties to help them prepare for an ADR session, including selecting a session neutral

· Serving as a session neutral conducting meetings or discussions in which ADR is used

· Consulting with session neutrals to ensure the quality of services provided to parties

· Assisting parties in finalizing and obtaining approval of agreements reached in ADR

Other activities of ADR program personnel that may not be protected as DR communications under the ADR Act include:

· Educating agency personnel and management generally about the use of ADR

· Offering information on the services provided by the ADR program

· Training session neutrals to provide ADR services

· Establishing and managing a roster of neutrals

Although not always understood or recognized, confidentiality attaches to communications in the early, pre-session phase of an ADR process, since the ADR Act’s definition of a “neutral” (5 U.S.C. §571) includes anyone who functions specifically to aid the parties in resolving their controversy.  The Federal ADR Council’s formal guidance on confidentiality under the ADR Act states that confidentiality protections apply as soon as a person seeking ADR services contacts an appropriate neutral—including communications that are made prior to a face-to-face DR proceeding.  The Council suggests that “neutrals” can perform diverse functions during all stages of the resolution of a disagreement, from convening participants and designing an effective dispute resolution procedures to conducting  settlement discussions. 

Informal contacts occurring after the termination of a session may have fewer confidentiality protections.  The ADR Act’s statutory scheme is intended to protect communications that are made for the purposes of resolving the controversy.  Thus, no statutory protection is afforded to a final written agreement or contacts following completion of the DR proceeding.  In practice, it may not always be clear when a proceeding has ended, and existence of confidentiality protection for informal contacts at or after the close of a process may depend on a case-specific analysis of the facts. For example, the dispute resolution program administrator may be responsible for securing final approval of a settlement agreement by agency or other personnel not at the table during the DR session.  The program administrator would maintain confidentiality until that approval is given.

##### Challenges Involving Administrative Neutrals’ Communications Within and Among Agencies

**Approaches to administering agency ADR use.** The organization and location of ADR functions differ among and within agencies, and administrative staff in some settings can face a particular challenge in establishing their role as neutrals in implementing the ADR Act’s protections for DR communications.  

In some federal agencies ADR services are made available through a centralized ADR office that provides ADR resources or support to the entire community of agency users.   Other federal agencies may have multiple agency offices with responsibility for ADR programs, depending on the nature or context of a dispute.  Program managers also exist outside federal agencies; for example, an agency may contract with a private or state organization to perform intake and other program management functions for its DR proceedings.  

Moreover, the significant activity that takes place before the parties come together may involve a number of individuals who play different roles.  These can include personnel from the agency’s EEO, Human Resources, Contract Appeals, Grants, and Administrative Hearings offices, and even ADR program managers located in other agencies or outside the Federal Government.   Whatever the arrangement, planning and care by program managers will be needed to safeguard DR communications.   This will be particularly true for offices where personnel perform multiple roles, including service as a session neutral.

Administrative staffing and support for ADR programs will also vary.   In some centralized ADR offices, employees serve as full-time neutrals dedicated to providing ADR services to government employees or outside parties.  In many other programs, employees may have responsibility for providing both traditional office functions and ADR services as the need arises.   For example, in an agency EEO office, an EEO counselor may be the first point of contact for someone seeking assistance in resolving a workplace related dispute.  If using ADR is raised during the discussions, the EEO counselor may forward the request to another staff member in the EEO office who handles ADR services or may shift roles and become a DR neutral in helping parties prepare for an ADR session (e.g., mediation).

# Because personnel in many ADR offices may carry out functions besides serving as an access point or neutral for ADR, roles can become blurred, making it difficult to ascertain the point at which an individual’s discussions about whether and how to employ an ADR process triggers the Act’s protections.  Confusion may arise under a variety of guises, especially in an agency without a designated, conscientious ADR program office.  For example, as noted above, an EEO counselor may be the first point of contact for an agency employee who files an informal complaint seeking assistance regarding a workplace-related dispute.   During discussions, the EEO counselor may raise the possibility of using ADR to address the issues raised.  If the individual agrees to pursue ADR, the counselor then makes a report to that effect and is removed from the complaint process.  However, how or when a complaint gets transferred from a counselor (to whom ADR Act confidentiality does not apply) into an ADR process differs among agencies, and the point at which the ADR Act’s protections come into play may not always be clear.  The development and implementation of operating policies can help alleviate confusion and enhance protection for both parties and administrative staff.

**The expanded use of electronic communication.****The increased use of technology in communications—including e-mail, internet applications, computerized data processing, electronic data storage, and facsimile transmissions—has made it more difficult to protect privacy and confidentiality.   ADR program practices may not have kept pace with advancing technology, and confidential communications may be unintentionally accessible to unauthorized individuals.  For example:

· The program’s intake neutral requests very basic information from an agency representative to assist in making referrals and to establish a record for management purposes.  The agency representative faxes information on the case to the intake neutral at a shared fax machine in a central office location.  The faxed information is available to anyone who might have access to the room where the fax is located, even those who have no connection with the ADR program. 

· In order to facilitate case tracking, a roster manager designs a database.  The agency has a policy that all work-related data bases must be maintained on a shared computer drive that other agency personnel may access.  Agency employees who are not acting as neutrals and have no understanding of the confidentiality implications may have access to the information.  

· A collateral-duty mediator volunteers to outline a tentative settlement agreement, and the parties agree.  All are interested in building on the momentum generated in the mediation session.  The mediator, located in the headquarters office while the parties work in a field office several states away, sends the draft agreement to both parties as an e-mail attachment.  

These examples indicate how typical the government’s use of technology to conduct its business can result in inappropriate impacts in light of the confidentiality provisions of the ADR Act.  DR program administrators should take these steps to help ensure that confidential communications are protected:

· Avoid the use of names and other personal identifiers in shared electronic databases;

· Whenever possible, do not enter potentially confidential information into shared files; if other options are limited or non-existent, limit access to files through the use of passwords or other methods; and

· Advise both roster members and users, to avoid sharing confidential information by fax, e-mail or e-mail attachments.

Further guidance for government ADR professionals on information technologies and confidentiality may be necessary. 

#### Intake: A Closer Look

**Early-stage activities defined.**Informal contacts, intake, case assessment, and convening activities often require interaction with prospective ADR participants prior to any formal agreement to engage in ADR.  These tasks take place during the early stages of many (though far from all) mediations or other ADR processes, and can yield critically valuable information and increase the likelihood of a successful DR proceeding.

Intake is the initial communication that takes place with a potential party or other individual who wishes to learn more about possibly employing ADR for a particular dispute.  Intake may involve simply providing general information about as program’s operation and ADR processes, or can extend to extensive, sensitive exploration of a specific dispute,  whether and how to shape an ADR process to address it and convening the parties to the dispute.

**Initial contacts in employment disputes.** The goals of ADR program personnel in employment disputes during the initial contact are numerous: gather information in a confidential manner that ensures some degree of trust; determine whether an ADR process is appropriate and feasible;  and advise the parties of the viability of undertaking an ADR process, the type of process recommended, who might be appropriate neutrals to serve on the case, and the resources they ought to plan on committing to the process. 

The ADR program person doing intake, assessment, or convening must have the knowledge to respond to a number of different questions during this initial conversation, including: 

· Describing what the process entails; 

· Explaining “confidentiality"; 

· Providing guidance on the enforcement of a settlement; and

· Establishing authority within the agency to settle.        

**Initial contacts in contract disputes.******Traditionally**,**contract dispute cases did not generally engage an ADR-type process from the start.  However a change in the regulations governing government contracts (the Federal Acquisition Regulation, or FAR) resulting from the ADR Act has led to greater use of ADR at the pre-dispute stages.  Occasionally parties agree to submit a dispute to ADR before a contracting officer’s final decision has been issued.  In fact, the FAR requires both the government contracting officer and the contractor to consider using ADR and to either offer to pursue ADR processes to resolve a dispute or provide an explanation as to why they will not.

A prime example of this increased use of ADR in contract disputes is seen in the policies and procedures used by the Federal Aviation Administration’s Office of Dispute Resolution.  The FAA Office of Dispute Resolution for Acquisition (ODRA), which serves as an ADR and adjudicative forum independent of the Contract Disputes Act (CDA), has been directed by Congress, in conjunction with its resolution of bid protests and contract disputes under the FAA’s Acquisition Management System (AMS), to utilize *consensual* ADR “to the maximum extent practicable.”  

Parties to a government contract dispute will often use ADR processes to facilitate settlement once litigation has been joined, and generally after some amount of fact-finding has occurred. Once a contract dispute case is docketed, the Board of Contract Appeals typically provides notice outlining ADR options.  The Administrative Judge and the Dispute Resolution Officers sometimes perform intake functions, for example, explaining in more detail ADR techniques, options, and potential mediators.   Because intake may lead to discussions on the merits of the matter, good practice suggests that the official conducting the intake will not participate in any further adjudication should ADR prove unsuccessful.

**Confidentiality Agreements**

Among their diverse tasks, many program administrators develop model forms and language for routine documents, such as agreements to enter into an ADR process, and advise neutrals and parties utilizing their program on how to interpret or adapt them.  Thus, it can be vital for administrators to understand issues relating to party confidentiality and potential ramifications of parties’ revisions to model agreements. These issues are discussed in Chapter 5, Parties and Confidentiality Agreements.

# Practical Guidance for ADR Programs and Administrative Neutrals

**Promoting confidentiality systematically.** Agency and private sector programs that offer ADR services in cases under the ADR Act, either as part of a centralized office or in connection with other responsibilities, should take steps to ensure that sensitive communications will always be handled carefully to protect them under the ADR Act.  These actions can include:

· Ensuring that agency management, agency personnel, and others understand that the ADR Act covers certain program staff communications

· Educating ADR program personnel regarding the legal and practical limitations of confidentiality, so that they can set appropriate party expectations for confidentiality  (This should include providing copies of  this *Guide* to these personnel.)

· Clearly designating as “neutrals” ADR program personnel performing intake, advisory, and assessment processes

· Formally recognizing in agency policies and guidance, position descriptions, practice standards, model agreements to employ ADR, or other documents that some of the services provided by ADR program personnel constitute activities of a neutral

· Discussing confidentiality with participants in a conflict near the start of intake or other informal contacts  or  requiring parties to sign confidentiality agreements near the outset that acknowledge the neutral role played by ADR program personnel

· Ensuring that, during intake, ADR program personnel: (1) describe their general obligation to protect DR communications with prospective participants, and (2)   explain any exceptions to confidentiality that might be relevant to the situation

· Exercising caution in handling case-related information because of its sensitive nature even when administrators’ activities may not trigger the confidentiality restrictions of the ADR Act

· Avoiding or limiting use of electronic or shared means to send or store confidential information on government systems that are not secure and may be subject to monitoring

· To the extent that information or records located in case files have been prepared by parties or a neutral for the purpose of resolving a dispute, marking and treating them as confidential and maintaining them in a separate, secure filing system

**Treating sensitive communications as confidential day-to-day.** Managers should take steps to assure that individuals engaged in intake activity or other informal contacts with potential participants in ADR processes understand their roles and the confidentiality implications of those roles.  They should ensure that program personnel:

· Understand that they should be designated by their agency or program as neutrals

· Articulate their role early and often, and otherwise understand their role and try to help others appreciate it 

· Keep only minimal notes or other records of cases, including little or nothing beyond when a request was received, who was referred or contacted, who mediated, the outcome, and the type of case

· Especially avoid putting in writing unnecessary information concerning the substance of a dispute

· Know the electronic data bases used in managing their ADR roster or program, and  who has access to this information 

· Treat with care information regarding neutrals listed on a program roster, limit access, and use it for program administrative purposes only

· Seek advice when in doubt

**Chapter 4**

**Session**

**Neutrals**

Session Neutrals and Their Roles

Legal, Ethical, and Practical Duties of the Session Neutral

Why Session Neutrals and Parties Must Understand Confidentiality in Advance

Dealing with Potential Exceptions to the Disclosure Prohibition  

*Overview*

*Information required by statute to be made public*

*Information a court may order disclosed*

*Handling disclosure requests*

# Practical Guidance for ADR Neutrals and Programs Using In-House Neutrals

*Confidentiality advice for session neutrals*

*Advice for agencies using in-house neutrals*

**Session Neutrals and Their Roles**

Mediators and other “session neutrals” are key figures in ADR processes.  This neutral third party works with the disputants to help them resolve their conflict, and his or her presence is key to the ADR Act's applicability.  Typically, the session neutral presides over and manages the process by which parties seek to resolve their differences. Depending on the ADR process and its setting, a session neutral’s role can vary substantially.  Some work to establish a structure for negotiation that builds trust and assists parties to work out their disagreements; others (like early neutral evaluators, settlement judges, arbitrators, and even some mediators) may employ more evaluative methods. 

A mediator is the prototype session neutral, but there are many other kinds.   To qualify as a “neutral” under the Act, the neutral *must* function *specifically* to:

· aid the parties

· to resolve an issue in controversy

· relating to a federal administrative program 

Thus, a mediator or facilitator who specifically aids parties to negotiate an agreement that resolves a particular issue in controversy is a “neutral” under the ADR Act.  By contrast, the ADR Act’s definition (and protection) of a “neutral” does not cover some activities of a facilitator—unlike a mediator, who always works to help parties reach resolution of a dispute.  Facilitators sometimes moderate or oversee a framework in which participants, instead of resolving issues in controversy, hold a generalized discussion of their problems, seek to improve mutual understanding, or do long range planning.   

The Act’s applicability has nothing to do with whether a session or administrative neutral comes from government, the private sector, or another program handling disputes involving federal programs.  Indeed, a neutral need not even be "neutral," so long as the parties accept and use her specifically to aid in resolving an issue in controversy.

The "session neutral" is often an experienced, trained professional; however, to create a broad pool of available neutrals, the ADR Act states that a neutral need only be an individual who is acceptable to the parties.  (Section 573(a)).  In practice, once appointed, the session neutral will typically act in a manner that is rigorously neutral in dealings with all parties.  A neutral's appointment does not require a written agreement or a specified party selection process; many ADR session neutrals are "appointed" by program administrators, agencies, chief judges, or others, subject to the parties’ veto.  

**Legal, Ethical, and Practical Duties of the Session Neutral**

ADR neutrals' various activities are governed by a number of ethical, legal, professional, and practical obligations relating to confidentiality.  

The Administrative Dispute Resolution Act protects confidentiality of communications involving any neutral, based upon (1) the express intent of the source (of information) that it not be disclosed or (2) circumstances that imply that the neutral created an expectation on behalf of the source that the information will not be disclosed.   Neutrals in federal ADR generally operate under the Act's flat prohibition against disclosing or being required to disclose DR communications, with a few statutory exceptions authorizing disclosure in limited circumstances.  Prior notice to parties is required when protected communications are sought, and parties then have the opportunity to contest disclosure under a balancing test based on statutory criteria.

In addition, the Standards of Conduct for Mediators—probably the most widely recognized ADR ethics code —require that a mediator keep confidential any matter that a party expects to be confidential, unless given permission by all parties or unless required by law or other public policy to disclose such information.  While there is no code of ethics specifically applicable to mediators or other neutrals engaged in federal agency ADR, most well-designed programs have decided to apply these or similar standards.

The rules governing a neutral's activity, and parties' reasonable expectations, will almost always be shaped by specifically applicable legislative standards—in this case the ADR Act—although in a few cases contravening ethical canons or other statutes may need to be harmonized.  Expectations may also be influenced by other specific factors: the ability of a neutral to communicate effectively his knowledge and understanding to the parties; the practices and procedures of a neutral or a program; and what parties and neutral decide jointly in advance. 

Another factor that can occasionally affect confidentiality obligations is—whether the neutral works as a private practitioner, as an employee of the disputing agency, in another agency, or in a judicial, ombuds, or other bureaucratic niche.  While private practitioner neutrals in federal settings are covered by the ADR Act's mandates and procedures, they are not subject to certain ethical, disclosure, or record-keeping duties imposed specifically on government employees (including federal workers who serve as full-time or collateral-duty neutrals).   

Finally, post-ADR actions by session neutrals and administrators can affect confidentiality; a neutral's or administrator's post-proceeding disclosure of DR communications can unravel present and potential parties' confidence. 

**Why Session Neutrals and Parties Must Understand Confidentiality in Advance**

An ill-informed or overly expansive view of confidentiality can create unreasonable participant expectations.  A neutral should know, and be able to communicate the following: the nature of his process role, the scope of his confidentiality duties, and the extent of the protections applicable to parties.  He should also consistently act in a way that accords with those protections and ensures that parties’ reasonable expectations are met.  

At the outset of an ADR proceeding, and as necessary during the process, a neutral should assure that parties and other participants are appropriately and correctly advised of the extent and limits of confidentiality.  A neutral may also discuss whether the parties (including the mediator) wish to develop their own rules, and set expectations and actions accordingly.  (For instance, "If you tell me something in private and ask me to keep it confidential, I am bound by law not to disclose this information voluntarily.  There are some obvious exceptions to this rule, which I can discuss if you like, but I do not expect them to arise during our mediation.")

Neutrals should seek to ensure that the extent of discussion of confidentiality rules is neither too much nor too little, but is appropriate for the issues and parties involved.  Sometimes, one or more parties will want details, or to develop case-specific rules; at other times, a party may be overwhelmed or intimidated by lengthy explanations.  In most cases, a neutral should offer a brief explanation of the general scope and limits of confidentiality, and be prepared to discuss specifics as to which participants wish added information.

**Dealing with Potential Exceptions to the Disclosure Prohibition**

**Overview.**  As explained in Chapter 2, the Act's four exceptions to its general prohibition against disclosure by a neutral are:

· All parties to the dispute resolution proceeding and the neutral consent in writing, and, if the dispute resolution communication was provided by a non-party participant, that participant also consents in writing

· Communications that have already been made public

· Information that is required by statute to be made public

· Information a court may order disclosed, after proper consideration, in order to prevent a manifest injustice, help establish a violation of law, or prevent harm to the public health or safety

A competent neutral should be able to deal with the first two of these with little difficulty.  On rare occasions, the final two may raise some complicated issues.

**Information required by statute to be made public.****The Act's reference to "information that is required by statute to be made public" makes clear that its prohibition may be overridden where another statute clearly mandates disclosure.  By its terms, an agency regulation, court decision, decision by an agency adjudicative body, common law, or any other standard that might conceivably fall under the rubric of “public policy” will not supersede the Act’s general prohibition.  

Several questions arise regarding the exception’s references to “statute” and “made public”:

· To which statutes does it refer?  Do these include only federal statutes, and if so which ones?  Will state statutes that mandate disclosure prevail in the state in which the DR proceeding takes place?   

· Is “made public” intended to include only cases where a law mandates broad disclosure to the general public or also those where an individual is obliged to report certain especially serious behavior to specified public authorities?  For instance, does the Act recognize the statutory duties that virtually every state imposes on all citizens to report knowledge of an instance of child abuse or someone’s intent to commit a violent felony?  

· Finally, what process will be employed for deciding these questions, harmonizing competing statutes, or minimizing harmful disclosures?

By allowing the ADR neutral to disclose confidential information “required by statute to be made public,” what did Congress actually intend?  These questions have not been definitively answered in the context of the ADR Act; neither legislative history nor case law addresses them explicitly.  Two significant federal laws—the Inspector General Act and the Whistleblower Act—do not require that information be "made public" but do mandate federal employee cooperation with certain investigative information requests.   Does an agency neutral’s “cooperation” with such investigators’ demands mean that information shared with investigative personnel is “made public,” and if so would it negate entirely the ADR Act’s mandated protections and disclosure process for in-house neutrals?  

Interpreting the language narrowly, the answer would be no, and presumably such requests would need to satisfy a judicial balancing test under section 574(a)(4).  There is, after all, little ambiguity in Congress’ use of the words “required by statute to be made public.”  Whether this exception applies to more limited access statutes such as the Inspector General Act is debatable.  

Given these uncertainties and the importance of ADR administrators’ and neutrals’ protecting the integrity of their processes, some federal ADR programs have sought at least to avoid surprise.  They require their neutrals to include a statement apprising parties of possible disclosure obligations.  (For example, “If you confess your intention to commit a felony offense, or that you plan to commit a violent physical act, I may be required to share this information with appropriate authorities.")  

ADR administrators and neutrals should consider carefully before deciding to share any DR communication in those rare instances where a requestor cites a statutory exception.  They may wish, for example, to establish policies regarding whether section 574(a)(3) requires disclosure when a neutral obtains specific knowledge (as opposed to generalized suspicions) of child abuse, intent to commit a felony, or other data covered by state or federal disclosure laws.  They may invoke the Act’s requirement of notice to parties and a balancing process similar, or identical, to that set forth in section 574(a)(4) (discussed below).  In this regard, it is important to note that even if a statute requires that a DR communication be made public, the ADR Act requires a neutral to divulge it *only if*no other person is reasonably available to disclose it.

**Information a court may order disclosed.**The ADR Act recognizes that occasional situations may arise when confidentiality may be asserted improperly, cause serious harm to the public, or thwart justice. These could include making bogus claims of confidentiality  that prevent defendants from obtaining evidence necessary to establish their innocence.****

Thus, under section 574(a)(4), if a judge determines, after an appropriate proceeding is held, that disclosure of a DR communication is necessary, a neutral may be ordered to disclose it.  The determination by a court that disclosure is necessary would be based upon one of the following criteria: disclosure would prevent a manifest injustice, or it would establish a violation of law, or it would prevent harm to the public health or safety.  This judicial determination under the ADR Act also requires the court to balance the preceding criteria against the damage to the integrity of the ADR process that disclosure would bring, signaling Congress’s intent to make such disclosure by neutrals a rare case.

**Handling disclosure requests.****In unusual circumstances, a neutral or program administrator may face a request for access to a DR communication, or may identify a possible ethical or legal duty to consider making a disclosure.  Before acquiescing or moving ahead, the neutral should go immediately to the program administrator, or a legal or other trusted advisor familiar with the ADR Act, to discuss how to meet confidentiality obligations.  

It is critical for neutrals and ADR administrators to follow a presumptive no-disclosure policy.   Congress recognized that parties would be less forthcoming if they knew disclosure to be a significant possibility, and that a breach of confidentiality in a few high-profile cases could result in a damaging loss of trust in the confidentiality of federal ADR.

This does not mean that a neutral or program administrator should reject all information requests out of hand or rigidly refuse to recognize the important missions and functions of other agencies and staff.  Some requests will involve non-protected information or communications that parties and neutrals may not object to sharing.  Regardless of the requestor and regardless of the claimed basis for disclosure, the neutral should engage respectfully any request for a protected DR communication, explain the ADR Act’s prohibition against neutrals’ disclosure and the reasons for it, and seek mutually agreeable, legally sound methods for handling requests.

Neutrals and program administrators should also remember that under the ADR Act, parties must be given an opportunity to object to disclosure of protected communications.  If a party does not consent, a process will be initiated for a competent legal determination whether any of section 574’s exceptions require disclosure.  A neutral who discloses first and asks questions later is subjected to potential liability or grievance for unethical behavior, and makes impossible the principled weighing process contemplated by the ADR Act.

# Practical Guidance for Session Neutrals and Programs Using In-House Neutrals

**Confidentiality advice for session neutrals.**

· Explain confidentiality rules and check for understanding by the parties.  This creates joint expectations and promotes sensitive handling of ADR communications.   

· Set reasonable expectations of confidentiality. Do not provide parties with an “agreement to mediate” that overstates the degree to which the communications may be protected.

· Know and understand the standards that apply to the parties and to an individual private, public, or collateral duty neutral, including statutes, ethical codes, and any program- or agency-specific practices.

· Be sensitive in discussing confidentiality rules.  Gauge what is appropriate for the issues and parties involved.  If one or more parties want greater details, take care to explain.  If a party is overwhelmed or intimidated by lengthy expositions, simplify your explanation to include only the basic information needed.

· Set realistic expectations for maintaining confidentiality.  Promote confidentiality in all aspects and stages of day-to-day ADR activity, and be prepared to meet, explain, and defend confidentiality expectations.

· Use—and be prepared to amend for good cause—model statements, standard ground rules and procedures, and sample confidentiality provisions.

· Segregate all confidential case files (whether on paper or electronic), and keep them in a separate, secure location to which no other staff has access. 

· Except where prohibited by government records retention laws, destroy all neutral's notes and destroy or return all party-furnished documents or other DR communications at the close of a proceeding.

· Private sector neutrals should ensure that contracts with agencies do not provide that contractor work product is available to, or becomes the property of, the agency or program administrators.

**Advice for agencies using in-house neutrals.**Agencies whose own employees serve as neutrals or administer agency ADR programs can:

· Include accurate and understandable instruction on the ADR Act’s confidentiality provisions in training programs for neutrals and administrators.  

· Develop training materials regarding confidentiality. 

· Provide focused, continuing education regarding confidentiality.  Give in-house neutrals sufficient opportunities to apply the knowledge and understanding of confidentiality rules on a regular basis in role-play situations using actual case materials. 

· Promote some degree of uniformity for parties in ADR proceedings.  

· Provide written and oral instruction regarding confidentiality for case neutrals, ADR administrators and parties.  

· Establish protocols for neutrals or case administrators that are mandatory in all proceedings.

· Discuss confidentiality protections generally in ADR awareness training for management and employees.  

· Require a baseline understanding among potential ADR parties and other affected interests and motivate agency personnel to consider ADR in resolving disputes.

· Ensure that disclosure issues—before, during, and after an ADR proceeding—are handled consistently, with a view to protecting, and not diminishing confidentiality.

· Build a framework that construes the ADR Act’s confidentiality protections broadly, and applies its exceptions narrowly. 

· Instill in neutrals and administrators a presumptive policy of “no disclosure until decided otherwise” in response to a demand or request for the information, regardless of the requestor and the claimed basis for disclosure.  

· Explicitly solicit the input of affected parties in any disclosure decision.

· Engage respectfully any request for disclosure of a protected DR communication.  Recognize the missions and functions of other agencies and their staff.  

· Explain the confidentiality policy and its underpinnings, and seek mutually agreeable methods for handling of requests to avoid, or at least minimize, any infringement of a party's reasonable expectation of confidentiality under the ADR Act. 

· Provide “confidentiality advisors” who neutrals would contact with questions regarding particular situations.

**Chapter 5**

**Parties**

**and**

**Confidentiality Agreements**

Parties’ Expectations of Confidentiality

# Confidentiality Agreements

*Confidentiality provisions of ADR agreements*

*Rationale for including additional protections*

*Rationale for excluding additional protections*

*Signing*

*Other participants*

Mediation Techniques

Waiving Confidentiality Protections

**Parties’ Expectations of Confidentiality**

Just as ADR proceedings can vary considerably—from mediation of an intra-office conflict to mini-trials involving a legally complex contract dispute to resolution of a regulatory or enforcement problem affecting millions—so too the participants’ need for confidentiality will be different in various settings.  Participants may be private citizens or government employees.  They will range from parties who are highly sophisticated and well-represented to individuals taking part for the first time and doing so on their own.  In some settings, they may find it crucial to assure that all parties and other participants disclose as little outside the negotiation sessions as possible, while in others they may have little reason for concern about what any participant says outside the ADR proceeding.

A key factor in maintaining suitable confidentiality is making sure that parties have appropriate, mutually consistent expectations as to the confidentiality rules that will apply in their case.  Depending upon the dispute and the ADR process involved, this may be done with a brief discussion and little fanfare during the mediator’s opening statement, at the start of an initial joint session, or (since the ADR Act permits parties and the neutral to vary confidentiality terms) could involve considerable advance deliberation and negotiation.  

Whatever the setting, it is important for all parties to understand what rules will apply and what degree of confidentiality will be accorded their dispute resolution communications.  In addition, parties need to be clear on the process to follow if confidentiality is breached, or if they receive a request for information deemed confidential.   Failure to address these expectations up front poses significant risks of confusion, discord, unfair surprise, and even long-term harm to federal agency ADR generally.

A primary consideration for parties (in addition to restrictions on disclosure by the neutral) is the extent to which statements made by them during an ADR process can be made public or used in another proceeding by another party.  The Act provides a reasonably clear guide, although the answers may not be what most parties would ideally want to hear. 

The ADR Act generally prohibits a party from disclosing the “dispute resolution communications" of another party.   However, as mentioned earlier in this *Guide*, section 574(b)(7) excludes from this general prohibition dispute resolution communications by a party to all parties in a dispute resolution proceeding.  Thus, documents and oral statements provided to or made available to all parties, for example during a joint mediation session, are not protected by the ADR Act against disclosure by parties.  (Disclosure of communications by a neutral to all parties is, of course, still prohibited by the ADR Act.)  However, other provisions of law may apply to protect such party-to-party communications.  For example, FRE Rule 408 and similar evidentiary rules applicable to administrative tribunals, prohibit the admission into evidence of statements made during settlement negotiations regarding an offer of settlement.   Federal statutes including Privacy Act, Procurement Integrity Act and Trade Secrets Act protect the confidentiality of certain types of information exchanged during a negotiation.   In addition, FOIA may allow an agency to withhold access to certain information held by federal government parties to a negotiation.  Thus, while not “confidential” under the ADR Act, information shared by a party in joint sessions may nevertheless be privileged, inadmissible, or prohibited from disclosure.

Parties may consider, and employ when appropriate, various methods of protecting party-to-party communications, beyond that afforded by the ADR Act and other federal statutes and rules.  Several options for the consideration of parties’ are discussed below, including confidentiality agreements and mediation techniques.

# Confidentiality Agreements

Commonly, a neutral will begin a DR proceeding with discussion of the parties’ expectations of confidentiality.  This may be sufficient to meet the needs of the parties and the neutral about confidentiality.  Even so, a written agreement specifying their understanding is a useful vehicle for confirming and harmonizing the expectations of the parties concerning confidentiality.  Such an agreement provides a structure for addressing and resolving confidentiality issues that may arise, as well as setting out clearly the limits or scope of confidentiality to be accorded the dispute resolution proceedings.     

**Confidentiality provisions of ADR agreements***.*****  In many agencies, the agreement of the parties regarding confidentiality is included as a provision of a broader agreement regarding conduct of the ADR process (often referred to as an ADR agreement).   Many agencies include such confidentiality provisions in their standardized ADR agreement.   However, in the absence of a broader ADR agreement, the parties and neutral may enter a separate confidentiality agreement.  

Although the confidentiality provisions of ADR agreements, or separate confidentiality agreements, are as varied as the agencies, commissions and boards that use them, generally speaking they include several common types of clauses:

***Title of the Agreement***.   The title of the ADR agreement should expressly indicate that the parties are using an alternative means of dispute resolution.  This starts with the title of the agreement.  Frequently, the title is as simple as “Agreement to Mediate,” or other such plain language.  Questionable titles like “Memorandum of Understanding” should be avoided.  

***Confidentiality***.   Most confidentiality provisions will have an opening statement that the dispute resolution proceeding is confidential.  After this statement, the structure of the agreements may vary.  Typically, the statement from the ADR Act that the neutral or a party in a dispute resolution proceeding “shall not voluntarily disclose or through discovery or compulsory process be required to disclose any dispute resolution communication” is included. This is often followed by a description of what is meant by communications, such as certain oral statements and written materials prepared for the dispute resolution proceeding and notes taken during the course of the proceeding.  Finally, most confidentiality provisions will state that the agreement to enter into a dispute resolution proceeding or a final written settlement agreement is not confidential.

***FRE 408*.**   Most confidentiality provisions will include a statement that the matters discussed are for the purpose of compromise and settlement of pending claims in dispute, invoking the protections afforded by Federal Rule of Evidence 408.  FRE 408 prohibits the admission into evidence of any communication made by a party during a negotiation regarding an offer of settlement or compromise.   Parties generally use or modify the language of Rule 408 to ensure that there is no ambiguity between the rule itself and the agreement in question.  Parties should be aware that FRE 408 permits admission of otherwise protected evidence, if it is offered to prove something other than liability or invalidity of the claim.  Parties should be aware that FRE 408 does not provide a basis to avoid discovery requests, and applies only to the settlement of an existing case in a forum that has adopted the Rule. 

***Limitation on Notes or Records***.   Many confidentiality provisions will include a statement that the parties will not take notes, records or transcripts of the dispute resolution proceeding.  While not uncommon in workplace or single session mediations, the clause is less common in proceedings that involve complex negotiations or multiple days.   In the alternative, this provision may include an agreement to return or dispose of written materials following conclusion of the dispute resolution proceeding. 

***Subpoena of a Neutral*.**Most confidentiality provisions include a statement that the parties, their officers, employees, attorneys and representatives, will not call upon or subpoena the neutral in any legal, arbitral or administrative proceeding of any kind to testify, or to produce any notes, files, or documents in any way created in connection with the ADR process.  This approach adds the possible remedy of damages for breach of contract, to the ability to quash a discovery request of the mediator under the authority of 574(a). The Committee is not aware, however, of an instance when such a clause has been the sole basis for quashing a subpoena or other discovery request or has been raised to recover damages.

***Protective Order Considerations*.**  In some cases, confidential and privileged information will be governed by protective orders that have been issued by an administrative tribunal or by a court.  The confidentiality provisions will need to reflect or refer to any applicable protective order.

***Exceptions to Confidentiality and Waivers****.***** The parties and the neutral may include statements in the confidentially provisions regarding dispute resolution communications that a party or neutral may disclose under the ADR Act.  The ADR Act provides that confidentially does not apply to certain communications made in dispute resolution proceedings.  Most confidentiality agreements will not refer to all of them specifically but will refer to them generally in a statement, such as “except for disclosure agreed by the parties or as required by law.”  

In addition, parties and the neutral may include a statement of their agreement to waive the confidentiality protections of the ADR Act regarding certain types of communications made during a dispute resolution proceeding.   For example, some workplace programs use a clause that excludes communications regarding fraud, waste, abuse, physical harm and criminal activity from the scope of confidentiality protections.  This can be accomplished through several methods, including a specific statement to that effect or incorporation by reference of a program or agency policy that enunciates that position.  

***Additional Confidentiality Protections for Joint Sessions***.  The parties may include statements in the confidentiality provisions regarding their agreement to hold as confidential among themselves certain communications not protected by the ADR Act.  A primary example is an agreement between parties to provide confidentiality protection for information available to all parties in joint sessions.  Such an agreement would constrain a party from voluntarily disclosing information obtained from another party in joint session, even though section 574(b)(7) excludes such communication from confidentiality protection under the ADR Act.  

The Committee notes that, to date, no court has ruled on the validity or enforceability of contractual agreements providing for additional confidentiality protections.  There are differing views about the legal basis and associated risks of such contractual agreements.

***Rationale for including additional protections****.*  The legal and policy rationale for including additional confidentiality protections indicates that, in enacting the ADR Act, Congress intended to continue the inherent, preexisting authority of agencies to negotiate and mediate, and to provide appropriate confidentiality to support these agency activities.  Proponents of this view note that the expressed congressional intent to encourage "creative, efficient, sensible outcomes" by authorizing "voluntary procedures which supplement rather than limit other available DR procedures” supports this view.  Further, that any concern raised by Congress regarding disclosure of information provided in joint session is focused primarily on potential restrictions on the right of third parties to access information under FOIA, and not the general ability of a party to disclose party-to-party communications.  Proponents note that the 2000 Guidance on Confidentiality in Federal ADR Programs, issued by the entity authorized by Congress to support agency development of ADR programs, provides that agencies and parties may enter contractual arrangements for additional confidentiality for their communications during joint sessions.

Several concerns, however, have been raised about including a provision to provide additional confidentiality provisions.  The Federal Government’s general policy of appropriate public access to government decision-making could be compromised when an agency is a party to an issue in controversy. Further, the ability to ensure quick access to information required for law enforcement or national security and the simplicity and administrative ease for agencies to use information needed to justify and implement agreements reached in a dispute resolution proceeding could be hampered.

***Rationale for excluding additional protections****.*  The legal and policy rationale for excluding additional confidentiality protections indicates that Congress, in drafting the ADR Act, intended to restrict the level of confidentiality afforded parties’ communications in joint sessions in order provide appropriate access of government officials to information and prevent potential abuse of the mediation process.  Proponents of this view note that the plan language of section 574(b)(7) excludes party-to-party communications in joint sessions from protection under the ADR Act and that congressional committees, in drafting the ADR Act, rejected a version of the section that made such communications confidential.   Further, that the language of 574(d), while expressly providing for alternative confidentiality provisions for communications by neutrals, does not do so for those of parties.  Proponents note that, though not protected by the ADR Act, some types of information shared by a party would be protected from disclosure by other federal statutes. 

Several concerns, however, have been raised about excluding a contractual provision between parties to provide additional confidentiality provisions.  Parties may be reluctant to participate in ADR proceedings because of concerns about the subsequent availability of sensitive information shared in joint sessions and candor in mediation discussions may be reduced.  Further, the lack of such protection may lead parties to an over-emphasis on "private caucus" or evaluative styles of mediation and other ADR processes, at the expense of dispute resolution approaches placing greater reliance or value on direct communication or relationship building among affected parties.

The Committee believes that, where consistent with the interests of all parties, it is appropriate and legally defensible for an agency to enter a contractual agreement providing confidentiality protection for information made available to all parties in joint mediation sessions.   The Committee notes that such agreements will affect only the actions of parties that sign the agreement.  Such agreements would not affect the ability of a third party to obtain information through legal process, including under the FOIA.  The Committee also believes the lack of a judicial pronouncement on the enforceability of such contractual agreements should not deter agencies from using this approach.  The Committee recommends each agency understand the different views on the value and enforceability of such clauses, as well as the potential impacts and risks, and reach its own conclusion on the best approach.   

**Signing**.  All participants at the dispute resolution proceeding should sign an ADR agreement containing confidentiality provisions.  This includes the parties and their representatives, if any, and the neutral.  The signing can occur prior to the dispute resolution proceeding, when the participants agree to participate or at the opening of the proceeding by the neutral.

**Other participants***.*   A dispute resolution proceeding may include participants other than the direct parties in interest, such as members of parties’ teams, experts, and observers.  These individuals should also sign the ADR agreement, both to reinforce the presumptions of confidentiality enunciated in the Act and to bind them to particular confidentiality provisions with respect to that ADR proceeding.

**Mediation Techniques**

If an agency is unable, or chooses not, to provide for the confidentiality of party communications in joint sessions through a contractual provision, several mediation techniques may be employed to protect the confidentiality of such communications, including the following:

· A useful procedure to address some of the concerns raised by Section 574(b)(7) is the use of shuttle negotiation techniques or private caucuses with the ADR neutral.  This strategy is a common feature in some federal ADR contexts, since statements made privately to the neutral remain confidential.  This procedure places significant importance on the skills of the ADR neutral.  Private parties need to be aware of this fact and consider it carefully in choosing or agreeing to the services of a particular neutral.  Additionally, shuttle diplomacy may not be a desirable technique in all dispute resolution sessions.  Sometimes, maintaining or fostering open and direct communication between the parties is one of the goals of the process or considered crucial for reaching agreement.  

· Another procedural device involves using working groups comprised of subsets of the parties, since the ADR Act treats as disclosable only statements made when all parties are present.  Such a working group can present a summation or consensus of the group's views, preserving anonymity and confidentiality for statements made by participants in generating the working group's recommendations or other product.

Where potentially embarrassing or sensitive matters may factor into settlement discussions, a party or representative needs to be prepared to raise or confront these matters in a way that preserves confidentiality.  For example, if the parties are engaged in direct negotiations, the private party representative should plan to employ a caucus with the neutral at key points in the process.  Educating parties and neutrals through agency educational materials, outreach, training modules, and best practice advice by program administrators can serve to reduce possible unintended consequences stemming from the Act's section 574(b)(7) confidentiality exception.

**Waiving Confidentiality Protections**

In addition to a written agreement to waive the confidentiality protections of the ADR Act, a party can waive (give up) their rights to confidentiality in a number of different situations.  Where a neutral is having a confidential discussion with a party, the party may say that what they are discussing, or some part of it, does not have to be kept confidential.  In such a case, the party has waived their right to confidentiality by the neutral regarding such statements.  This may occur in many different situations; for example where a program administrator is conducting a confidential case assessment or a mediator or neutral is meeting in private caucus with a party.  In addition, in a complex commercial litigation where the parties agree on some limited discovery prior to the negotiations and agree that the documentation submitted can be used in future litigation, the parties have agreed to a waiver of their confidentiality rights regarding those documents. 

**Chapter 6**

**Confidentiality**

**in Particular**

**Government**

**ADR Situations**

Multi-Party ADR

*General characteristics of multi-party ADR processes*

*Convening a multi-party ADR case*

*******The negotiation stage of multi-party cases*

*Communications from a non-party*

*Other federal statutes impacting multi-party situations*

Ombuds Programs

*The ADR Act applies to ombuds activity*

*How is ombuds confidentiality different?*

Matters before Administrative Tribunals

*Administrative adjudication and ADR*

*Factors to consider*

*A case study: ADR at the Armed Services Board of Contract Appeals*

Settlement Approvals

*Addressing the need to disclose to stakeholders*

*Considerations*

*Difficult cases*

*Implementing the settlement*

*Sample provisions*

**Multi**-**Party ADR**

**General characteristics of multi-party ADR processes.**An ADR process may involve only two individuals or it may involve scores of parties.  A multi-party process can be thought of as an expanded two-party process, generally with more of everything (e.g. parties, issues, documents, and mediation or other sessions).  While the framework is the same, there are a few additional areas of concern, which this section explores.

The confidentiality protections in a multi-party context are generally the same as those in a two-party case.  The ADR Act does not distinguish between two party and multi-party cases or impose a limit on the number of parties that can be involved in an ADR process, and its provisions encompass both proceedings with and without “named parties.”  The Act applies to any "dispute resolution proceeding"—i.e., any process in which an "alternative means of dispute resolution" is used to resolve an "issue in controversy" relating to a federal "administrative program" in which a "neutral" is appointed and specified parties participate. 

**Convening a multi-party ADR case.**As with a two-party ADR process, many multi-party proceedings begins with an intake or case assessment step which is used to gather information about a conflict, including whether it is appropriate for ADR.   In the multi-party setting, though, this "convening" process can be highly structured and very extensive.  In multi-party disputes, before parties ever sit down for an initial negotiating session, a neutral (often called a "convenor") may gather information that allows assessment of whether a conflict is appropriate for ADR.   The neutral's assessment of the case will typically precede any decision by the agency or other sponsoring entity to bring the parties together for a joint session.  This convening assessment will be based on interviews with the parties and review of written materials. 

The ADR Act confidentiality provisions apply to information provided to the neutral “in confidence” during the convening.  Keeping information obtained during the convening stage confidential, subject to the ADR Act, can be critical to launching a successful multi-party mediation or similar consensus-building process.  The neutral convenor typically would inform the parties being interviewed, or those providing written materials, that their initial conversations and submissions provided for purposes of the convening are deemed confidential.   

The convenor seeks to determine the feasibility of using an ADR process and assists parties, whether named or not at that point, to reach agreement regarding whether to go forward with the ADR process and how to structure and conduct the next stages.  Convening an ADR process involves the neutral's gathering information concerning who should be involved in the process; the interests of the parties; the parties’ willingness to participate in the ADR process; the parties’ representatives who will sit at the table; the issues to be addressed; the conditions, if any, for a party to participate; and the desired background and experience of the neutral who will conduct the ADR process.  As part of the convening, the parties also may reach agreement on the ADR process's schedule and ground rules, including the role of the neutral and any additional confidentiality protections.

Because of the number of people involved, the neutral engaged in convening typically interviews prospective parties separately, and sets up appointments to conduct those interviews, prior to any initial negotiating sessions among parties.  To manage expectations about the process in setting up interviews, the neutral convenor often uses a written or oral communication describing the purpose of the convening process.  These communications—ideally in writing—should indicate the convenor is acting in a neutral capacity to resolve issues in controversy and that information provided in confidence will be protected pursuant to ADR Act.  

The convenor often submits a written report, available to all parties and publicly, summarizing the information gathered during the convening stage without attributing information or statements to specific parties.  The report may make recommendations about how to structure any negotiation process and move forward.  There are a number of ways to summarize confidential information in such documents, such as organizing the references to group sectors or interest areas, so as to avoid any attribution, directly or by inference, towards one specific party or another.  While this convening report generally will become a publicly available document, it will not identify specific sources or directly quote people who were interviewed.  This report is often a useful tool in sharpening the focus of a multi-party process and bringing the parties to the negotiating table.

In some cases the parties may choose—after considering the neutral convenor's report—not to enter into an ADR process.  In this event the discussions, interview notes, and any documents prepared for this initial stage of the ADR process are confidential.  It is recommended that at this stage any and all confidential notes be locked away, segregated, or disposed of in accordance with agency regulations.

As mentioned in Chapter 3, a potentially problematic area is where an agency employs members of its staff collaterally in assisting as neutrals in intake, in case assessment, or in a convening role.  Agencies should designate these agency personnel or others who act as convenors as “neutrals” in advance under the ADR Act.  

**The negotiation stage of multi-party cases.**Once the convening phase is completed, a multi-party ADR process may move into its next phase, which usually involves the parties and others meeting in plenary sessions and smaller workgroups to develop data and proposals on specific issues.  As with two-party situations, the parties may caucus during plenary sessions and workgroup sessions. The ADR Act confidentiality provisions will apply in both group sessions and caucuses. 

In multi-party cases, the neutral plays an important additional role as a mediator/facilitator of the group process.  The neutral typically will prepare agendas and summaries and lead the meetings.  The initial stages of these cases often involve full plenary sessions, general discussions, and relatively "facilitative" activity by the neutral.  Parties have relatively little expectation of confidentiality in those settings.  Later stages, by contrast, may entail greater resort to workgroups, or to confidential caucuses protected by ADR Act; these will likely involve detailed substantive exchanges in which the neutral becomes more of a mediator who focuses also on helping parties do reality testing and generate mutually acceptable options.

A potential problem in the multi-party context arises because a “dispute resolution communication” generated by a party that “was provided to or was available to all parties” is not protected from party disclosure by the ADR Act.  This situation can occur in plenary sessions. To enhance confidentiality in these situations (and to avert potential disputes among the parties about disclosure), the neutral and the parties may supplement the ADR Act protections.  They can enter into an agreement governing the confidentiality of written and oral communications made with some, but not all, of the participants present or made by a party to all other parties.  An important distinction is whether the communication is generated by the neutral or by a party; if the former, it will be protected under ADR Act without resorting to supplemental agreements.  One way to take advantage of this distinction is for the neutral to prepare summaries of plenary and subgroup sessions, so the communications will be generated by the neutral.

**Communications from a non-party.**Multi-party cases often involve technical experts and others who support the parties in the process.  Neutrals communications with non-parties, such as technical advisors and consultants, are covered by the ADR Act confidentiality provisions *if*the information is provided in confidence with the express intention of the non-party that it not be disclosed, or provided under circumstances indicating a reasonable expectation that it not be disclosed. 

**Other federal statutes impacting multi-party situations.**In the policy context there are a number of other federal statutes that could impact a multi-party case, including the Federal Advisory Committee Act and the Negotiated Rulemaking Act.  Under both of these statutes, meetings of the full negotiating group, and in some situations working groups, are conducted in public.  In a process involving both the ADR Act and one of these other statutes, full confidentiality protections should apply in caucus sessions. 

**Ombuds Programs**

**The ADR Act applies to ombuds activities.** To date, most discussion of ADR confidentiality in the federal sector has focused on mediation.  By making ‘negotiations’ aimed at resolving differences and achieving “agreement” a predicate for invoking the Act’s coverage, the Act emphasizes mediation techniques and addresses the work of ombuds only to a limited degree.

Ombuds are ADR professionals who seek to give voice to people who might otherwise be disadvantaged in their dealings with the management or bureaucracy of the institution with which the ombuds works.  Ombuds perform a range of advisory, reporting, complaint-handling, and resolution functions, and may shift roles by imperceptible degrees in particular cases.  While an ombuds sometimes mediates or otherwise helps resolve specific conflicts (and may employ a mediator’s sensibility), the issues that come to an ombuds are not always initially presented as conflicts between disputing parties hoping to reach agreement.  Often the work that an ombuds performs in moving toward “resolution” is less formally structured than a typical mediation, and may not even appear to be a negotiation.  

Ombuds receive a variety of inquiries ranging from questions about rights, procedures and practices to complaints about decisions made by persons within an entity or the general functioning of an entity.  Although there are times when people approach an ombuds with issues already formulated as a dispute, often this is not the case.  Usually, the formulation of the issues as a conflict suitable for possible mediation comes after the inquiring party has begun to work with the ombuds; or after the ombuds has “looked into” the issues or concerns raised by the inquiring party.

A careful reading of the ADR Act indicates that many, but certainly not all, ombuds activities fall under the Act’s confidentiality protections.  The term "alternative means of dispute resolution," a key one in the legislation, is defined as including any procedure that is used to resolve issues in controversy, "including, but not limited to, conciliation, facilitation, mediation, fact-finding, minitrials, arbitration, and *use of ombuds*, or any combination thereof."   The fact that ombuds personnel may only sometimes engage in "traditional mediation" does not detract from their ADR status, or their status as neutrals in those cases where they do help resolve disputes.  As the above definition makes clear, the ADR spectrum encompasses a broad array of processes involving use of a third party to assist resolution.

The ADR Act requires that the subject matter involve an “issue in controversy.”   Some suggest that many issues presented to an ombuds are raised at too early a stage to constitute issues in controversy.  Under the Act's broad definition, though, "ripeness" is not the test.  An "issue in controversy" is one that "is material to a decision concerning an administrative program of an agency and with which there is disagreement."   Therefore, an issue is “in controversy" if it concerns a disagreement regarding an agency program or decision.  A complainant who calls an ombuds to complain and seek relief presumably is aggrieved over an agency action (or delay or inaction) and wants the agency to act in a way it has failed or declined to do.  Clearly this involves a disagreement (or “controversy”), albeit one that may sometimes need further inquiry or development. 

The matter must relate to an administrative program.  A case is likely to concern an "administrative program" if a federal agency is a party; an agency offers an administrative process that could resolve a controversy relating to its programs; the case relates directly to activities of a federal agency or others acting under a federal program; or funding from a federal contract or grant program is provided expressly to conduct or promote an ADR program.  Programs involving a "determination of the rights, privileges, and obligations of private persons" are specifically covered.

Another necessary component under the ADR Act is the presence of a third party to assist the disputants.  The "neutral" need only be an individual who is acceptable to the parties and who functions specifically to aid the parties to resolve an issue in controversy; a mediator is the prototype neutral, but there are many other kinds as well.  The Act’s applicability has nothing to do with whether this neutral comes from government, the private sector, or another program handling disputes involving federal programs.  Indeed, a neutral need not even be "neutral," so long as the parties use her specifically to aid in resolving a disagreement.

Finally, an ADR proceeding under the Act must have specific parties.  In the case of ombuds activities, these are the person who approaches the ombuds and raises a problem, and the agency or the agency official responsible for the decision or policy about which there is disagreement.  The decision to invoke the questioned policy with respect to the complaining party gives rise to a “controversy” meeting the Act’s requirements.  Thus, while the ADR Act's provisions do address some aspects of many ombuds' activities, it does offer protection whenever an ombuds seeks to assist in resolving specific controversies.  

**How is ombuds confidentiality different?**The ombuds needs to be able to protect the confidentiality or preserve the anonymity of the person or persons who brought an issue to the ombuds.  This can differ from the responsibility of mediators and most other ADR programs, and points out one of the major reasons confidentiality is important for ombuds in a broader and somewhat different way than for mediators.  While people often choose mediation because, among other reasons, it is confidential, it is typically the case that a dispute that is brought to mediation has already surfaced and is having an impact on the disputing parties as well as on others.  In many organizations the fact that a particular dispute is in mediation, as well as the identities of the disputing parties may be widely known.  For ombuds, however, it is frequently the ability to keep confidential the party’s identity and concern that provides the impetus, and comfort, that a party needs to raise an issue.  It is the very intent of an ombuds program to increase the likelihood of surfacing important issues that, if the ombuds did not exist, might otherwise not be attended to.

A variety of professional, legal, and ethical obligations imposed on ombuds mandate or strongly promote confidentiality.  The Ombudsman Association, a group of organizational ombuds, has promulgated a Code of Ethics stating, "We base our practice on confidentiality," and has issued Standards of Practice inculcating this notion in day-to-day activities.    Recently-adopted ABA Standards for the Establishment and Operation of Ombuds Offices****characterize the "essential characteristics of an ombuds” as independence, impartiality in conducting inquiries and investigations, and confidentiality."  

To be effective, then, an ombuds should not, without consent, reveal the identity of the party who has sought assistance, absent consent or statutory requirement.  In an ideal world, ombuds would be able to keep confidential the identity of those who seek assistance, the information provided to the ombuds, and any records the ombuds may require to meet the various responsibilities of the office.  Currently, though, many ombuds keep minimal if any notes, because of uncertainty about their ability to maintain confidentiality if challenged in court.  In the federal context, especially, where all employees are expected to report suspected waste, fraud or abuse, there is a lack of clarity about how to resolve the dissonance between these expectations, the definition of the ombuds role, and the generally agreed-on standards of practice for ombuds. 

Since the activities of ombuds fall along a continuum, the confidentiality protections in the ADR Act may not extend to all aspects of these offices’ work.  While the Act’s protection of intake, assessment, and other early stages of a DR proceeding offer protection to many activities, ombuds operate with less certainty as to confidentiality protections and will necessarily exercise caution  in advising participants as to their rights and expectations.

**Matters before Administrative Tribunals**

**Administrative adjudication and ADR.**Many administrative bodies authorize or encourage the use of ADR. Some matters may already be before the tribunal when the decision is made to use ADR to resolve the particular controversy, while other matters may be submitted to ADR before the tribunal’s jurisdiction is invoked.  For example, it is possible at some administrative tribunals, such as the Boards of Contract Appeals which hear disputes involving government contracts, to take advantage of the bodies’ ADR facilities even though the tribunal would not be able to hear the dispute, either because the issue has not ripened sufficiently or the parties involved are not subject to the Board’s jurisdiction.  

There are many different kinds of adjudicatory bodies in the various agencies, each with its own authority and procedures.  Because, the procedures and statutory authority of each adjudicative body differs, it is not possible in this *Guide* to give a thorough treatment of the confidentiality rules and procedures available. Instead, the Confidentiality Committee notes below some important considerations pertaining to confidentiality before administrative fora.  Participants must consider the specific rules and procedures of the forum involved before deciding how and through what means confidentiality will be available.

**Considerations.****

***Adjudicative authority****.*****There are various types of administrative fora in the federal agencies and it is important to identify the particular forum involved. Some of these bodies have been created by statute, others by regulation.  The parties must consider the tribunal’s jurisdiction, the finality of its decisions, the role of the particular member of the forum who will be participating and other relevant factors. 

***Forum procedures****.*****Most of the agency tribunals have established, written and published procedures.  Today many are posted on the web. The rules governing the administrative body can vary from agency to agency.  For example, the rules of the Boards of Contract Appeals differ from agency to agency.  It is therefore very important to obtain the rules of the particular administrative body involved.  That tribunal should be contacted and copy of its current rules obtained before any proceeding is begun.

***Relationships of the forum procedures to the ADR Act and other statutes****.* There are many statutes and regulations which impact the activities of an agency.  Parties should consider which of these may have an impact on the materials they or their counsel produce for the ADR proceeding and which statutes govern confidentiality issues.  This inquiry is critical because there may be a serious question as to whether other government agencies—not party to the ADR proceeding—may gain access to confidential matters.  For example, the Inspector General of an agency or the Internal Revenue Service may seek to obtain documents that parties use during an ADR proceeding.   These issues are discussed in detail in Chapter 9.

Generally, an administrative forum with statutory authority to hear and resolve specific matters, such as contract disputes, agency enforcement actions or personnel matters, will not look to the ADR Act to regulate its ADR program.  This is because the forum’s authorizing legislation usually permits it to establish its own rules of procedure, or assigns that duty to an agency head.  ADR processes are usually offered as an optional procedure that parties may pursue within the forum’s overall framework.  

***The ADR agreement****.*  Parties involved in administrative adjudication who wish to utilize ADR should always execute an ADR agreement.  The contents of the agreement will govern the proceeding.  The parties should take particular care in spelling out the confidentiality they expect and what use, if any, can be made of confidential materials if the parties successfully resolve their dispute.  There is a question whether the parties can extend the confidentiality provisions of the ADR Act by agreeing that all matters disclosed during an ADR proceeding should be confidential and that disclosure in the ADR proceeding will not waive the claim of privilege in another proceeding. 

***Protective orders****.*  Some administrative bodies, such as the Boards of Contract Appeals, will issue protective orders to prevent disclosure of information to individuals other than those allowed under the order.  The extent to which an order would be enforced in the face of a request for documents sought under the Freedom of Information Act has never been litigated.

***Third party interests****.***** It is important to keep in mind that the confidentiality provisions in the ADR agreement bind only those who are party to it.  Non-participants can generally file a Freedom of Information Act request with the government agency or administrative body involved.  Documentary materials will be released unless the documents qualify under one of the Act’s exemptions.  Moreover, certain oversight agencies, such as the various agency Inspectors General, may have statutory access that could override ADR confidentiality provisions.  Finally, the parties must be aware of the possibility that disclosure might be compelled in a court proceeding.

The following section provides an example of how confidentiality is addressed before the Armed Services Board of Contract Appeals, an administrative tribunal with jurisdiction over disputes involving Federal Government contracts.  It offers an overview of the law and acquisition regulations which govern the resolution of contract disputes, and promote ADR as a means for doing so.  Following a description of these programs is a discussion of how confidentiality issues have been addressed by the Board.

**A case study:  ADR at the Armed Services Board of Contract Appeals.**The Contract Disputes Act (CDA), as amended by the ADR Act, requires that a party to a U.S. government contract who rejects a request to engage in ADR to resolve a dispute provide the other party with the specific reasons for rejecting the request. In the case of a government contracting officer, the CDA (see 41 U.S.C. §605(e)) requires that the explanation cite, if applicable, the conditions identified by the ADR Act that militate against the use of ADR procedures (see 5 U.S.C. §572(b)).  In the case of a contractor declining ADR, the requirement for explanation is imposed by the standard “Disputes” clause of the contract (see FAR 33.214(b) and FAR 52.233-1, paragraph (g)).  

Typically, under the CDA, the parties elect ADR after a contracting officer’s final decision on the particular dispute has been issued and the contractor has selected the forum in which the dispute will be heard—either a Board of Contract Appeals or the U.S. Court of Federal Claims.  However, occasionally parties agree to submit a dispute to ADR before a contracting officer’s final decision has been issued.

Consistent with the CDA’s mandate to provide “to the fullest extent practicable, informal, expeditious, and inexpensive resolution of disputes,” the Boards of Contract Appeals have embraced the use of ADR for the resolution of contract disputes at any appropriate time in the claims process.  The use of ADR at the Armed Services Board of Contract Appeals (ASBCA), the largest board, is typical of the ADR practices of the other boards.

The ASBCA encourages parties to consider the ADR option when deciding how they will proceed with their appeals.  Since mid-1989, the ASBCA has included with every docketing notice a separate “Notice Regarding Alternative Methods of Dispute Resolution.” The docketing notice urges the parties to consider the ADR procedures summarized in the Notice for disposition of the appeal.  Similarly, after the Board receives the complaint and answer, it again suggests the use of ADR procedures in the election letter sent to the parties requesting that they advise the board on how they want to proceed.

A request for ADR may be made to the presiding judge or a member of the Board’s legal staff if the appeal is still in the initial development stage and has not yet been assigned to a judge.  A request may also be made directly to the Board Chair, particularly if a pre-appeal matter is involved.  Requests for ADR may sometimes also result from a conference initiated by the presiding judge or a member of the Board’s legal staff to explore the desirability of selecting ADR procedures to resolve all, or part, of an appeal.  Throughout this preliminary phase, the Board avoids engaging in discussions that would require confidentiality.  

Once the parties have decided upon the ADR method they wish to pursue, the Board judge works with the parties to develop an ADR process that is best suited to the particular circumstances of the dispute and then to implement the ADR plans and procedures they have developed to help bring the process to a successful conclusion.

A written agreement outlining the procedures to be followed is required for all ADR proceedings conducted by the Board.  Under the Board’s procedures, written material prepared specifically for use in an ADR proceeding, oral presentations made at an ADR proceeding, and all discussions in connection with such proceedings between representatives of the parties and the Board judge serving as a third-party neutral are treated as confidential and, unless the parties explicitly agree otherwise, inadmissible in any pending or future Board proceeding involving the parties or matter in dispute.  (Evidence otherwise admissible before the Board is not rendered admissible because of its use in an ADR proceeding.)  In the event the ADR is unsuccessful, the judge serving as the third-party neutral will be recused from any further involvement in the matter, unless the parties explicitly request the judge’s continued involvement and the Board’s Chair approves.  

The Board recognizes that the ADR Act does not protect all communications and that the confidentiality provisions in ADR agreements bind only the parties to those agreements.  Non-participants can file a Freedom of Information Act request with the government agency involved or the Board.  The information will be released unless the documents qualify under FOIA exemptions or are covered by the ADR Act’s confidentiality protections.  Finally, the parties cannot rule out the possibility that disclosure might be compelled in a subsequent court proceeding.  Consequently, if confidentiality protection is important to the parties’ decision to agree to use ADR procedures, the parties should specifically negotiate the issue in consultation with the Board judge who will act as the third-party neutral.  In any event, all confidentiality issues should be spelled out clearly in the ADR agreement.  Often, as a starting point, the parties will structure the agreement to take advantage of the protections that may be available under Federal Rule of Evidence 408 (which addresses the admissibility of offers to compromise) and the ADR Act’s confidentiality provisions, and then adjust the confidentiality agreement to the particular circumstances of an individual case.

While the boards have in place protocols for maintaining and maximizing ADR confidentiality, some agency-based ADR programs for resolving bid protests and contract disputes have yet to address specifically the issue of ADR confidentiality.  Also, in the area of federal contract dispute resolution, innovative processes for dispute avoidance and early resolution, such as the use of dispute review boards and project neutrals, are becoming more commonplace.  It is essential that neutrals and parties operating in all such proceedings be aware of what needs to be done to safeguard ADR confidentiality.

**Settlement Approvals**

**Addressing the need to disclose to stakeholders.**ADR processes involving government agencies or corporate parties (as opposed to private individuals) raise additional disclosure issues due to the “institutional” nature of such entities.  These include the following:

· The need to discuss the status or conduct of the DR session with colleagues assisting the representative,

· The need to disclose a possible ADR settlement and its details with superiors or other in-house reviewers in order to obtain approval, and

· The fact that certain laws and regulations require employees (especially in government) to disclose certain kinds of information.  

This section discusses the first two constraints listed above*,*i.e. the need to disclose ADR communications for the purpose of participating in the ADR and for obtaining approval of an ADR settlement.   The third constraint is discussed in more detail in Chapter 9  of this *Guide*,**which deals with access requests by investigative personnel, managerial supervisors, or others and suggests measures for addressing such requests.

Often, the need to disclose information learned in the ADR to superiors or other stakeholders arises in matters involving an institutional party rather than an individual.  It is typical, and desirable, for a party to be represented in the ADR process by a person with decision-making authority, or at least to have such a person in the room.  In fact, some mediators will insist that decision makers be present.  However, this is often difficult if not practically impossible when a large organization is involved.

Parties and government employees participating in workplace or other ADR with agencies should anticipate that representatives may need to enlist the aid or approval of others in their organizations who may not be present in the proceeding.  This would include legal representatives and other personnel with knowledge of the facts involved in the dispute.  In addition, in situations where the party is represented by an official who does not have decision-making authority, the parties’ representatives will generally need to disclose details of the settlement to superiors in order to obtain approval.

**Considerations.**Whether such a disclosure is prohibited by the ADR Act depends on whether or not the disclosed information falls within the definition of a confidential communication.  It should first be noted that confidential communications from a private party or government employee made to a neutral are normally not at stake since they are unknown to the other side.  Obviously, representatives can only disclose the information they have.  To prevent an unintended disclosure, a party should always inform the neutral whether or not particular information can be reported to the other side.

The information available to an organizational representative would include the terms of any settlement agreement, their own confidential communications with the neutral, and any communications made in joint sessions.  Under the Act, the terms of a settlement, as well as statements made in joint sessions, are not protected.  Likewise, the ADR Act permits a party to disclose his own confidential communications made to the neutral without the consent of the other party.  Use of this information to obtain assistance during the proceeding (or to keep superiors informed of the status of the ADR), and approval of a settlement is not prohibited.  Section 554(g) of the ADR Act specifically authorizes the use of information obtained or disclosed in the DR session for the purpose of documenting the settlement.

**Difficult****cases.**Even where a disclosure may not be not prohibited, it still may be problematic.  For example, in workplace ADR, a government employee may be uncomfortable with a disclosure of proposed settlement details to his or her supervisor. 

**Factors to consider.**  When crafting terms of an ADR agreement that will expand on the Act’s confidentiality rules, a party will want to consider other factors including: the subject matter of the ADR (e.g. workplace, rulemaking, contract dispute); the nature and value of the claim and prospective settlement, which will typically affect the level of approval necessary; whether the agency has assigned the authority to approve settlements involving a particular department or program to an independent manager not charged with program responsibility; and who the agency or other organizational representative reports to, i.e., legal counsel or department heads.   

**Sample provisions.**  To address the issue of internal approval disclosures for the purpose of pursuing the ADR, including settlement approval, a provision similar to the following can be included in the ADR agreement:

1.  This entire process is a settlement negotiation and all offers, promises, conduct, or statements made in this ADR proceeding are confidential and shall be inadmissible in any subsequent litigation (including proceedings before a board of contract appeals) of the disputes covered by this agreement. All written materials created specifically for this proceeding are also confidential and inadmissible in subsequent litigation.  However, if tentative agreement is reached, any such statements and written material may be used to justify and document the contract modification embodying the settlement. The neutral will treat the subject matter of this proceeding as confidential and refrain from disclosing any of the information exchanged to third parties. The neutral advisor is disqualified as a witness, consultant, or expert for either party in any matter relating to the disputes covered by this agreement.

Or:

2.  The parties agree that the entire mediation session is a compromise negotiation.  All promises, conduct, and statements made in the course of the mediation session are confidential and will not be disclosed voluntarily to the extent permitted by law.  See 5 U.S.C. §574.  The complainant/grievant also agrees he/she will not to disclose or discuss this settlement with other agency employees (except his or her representative and responsible management personnel). The complainant/grievant recognizes and authorizes the [agency/other representative] to disclose the terms of any settlement agreement to [agency/other officials] who may need to review and approve the terms of a settlement agreement.

Or:

3.  The agency/organization agrees it will not disclose or discuss this settlement except as necessary for implementation.  The complainant authorizes the agency/organization to disclose the terms of this Agreement to those officials who may need to review and approve the terms of the Agreement.

Where no ADR agreement is negotiated (or where a neutral or party desires greater detail), a neutral should make, and obtain agreement to, a statement to participants considering ADR confidentiality such as the following:

Confidentiality is a critical part of an ADR process.****If you tell me something in private and ask me to keep it confidential, I am bound by law not to disclose this information voluntarily.  There are some obvious exceptions to this rule, but I do not expect them to arise during our ADR process.  For example, if a judge determines, after an appropriate proceeding is held, that disclosure of our private confidential discussions is necessary to prevent a manifest injustice, or establish a violation of law, or prevent harm to the public health or safety, we may be required by a court to disclose our private discussions.

Having said that, I want you to please remember that facts that were discoverable before the ADR session do not become confidential merely because they were presented here.  It is only those things you say or write in confidence to me during the mediation that I will not disclose, unless one of the unusual exceptions I discussed above applies.  This means that neither the agreement to employ ADR nor the resulting settlement agreement, if any, are protected by the ADR Act.  For example, certain agency officials will have to review the proposed settlement agreement before it becomes binding on the agency—so the agreement itself cannot be kept completely confidential.

You must agree that, should this ADR process not resolve your dispute, you will not request information from me in any future legal proceeding—unless of course you have a dispute with me as a result of the ADR process.  If anyone asks you to provide information about what was discussed in this session, it is very important that you say nothing and that you immediately notify the [appropriate agency office] should be designated here]. The [official] will provide guidance and assistance about how to respond.

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**Implementing the settlement.**Once the parties have reached a settlement and the authorization process is complete, additional individuals may be involved in implementing the settlement.  Can the neutral or parties disclose information to non-parties to implement the agreement?
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The ADR Act does not provide for any exceptions to confidentiality specifically to implement a settlement.  With respect to information learned during the dispute resolution process, whatever confidentiality obligations the neutral and parties have during the dispute resolution process will continue during implementation.  Note, however, that since the dispute resolution proceeding will have already concluded at the implementation stage, any new information shared with the neutral(s) will not be protected by the ADR Act.
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This leads to some practical ramifications.  First, good practice dictates that during the DR proceeding, the parties should anticipate and decide what information can or cannot be shared—and with whom—during the implementation stage.  Second, some agency policies may provide guidance as long as they are acknowledged and integrated into the confidentiality agreement; e.g., that information learned during a DR process may be used on a need-to-know basis.
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**Chapter 7**

**Confidentiality**

**and**

**Federal**

**Record-Keeping**

Introduction and Overview of Federal Records Act Requirements 

The Federal Records Act and ADR Records

Practical Concerns for Confidentiality

Recommended Goals and Strategy 

**Introduction and Overview of Federal Records Act Requirements**

Federal agencies routinely create and maintain records of their activities central to the conduct of their missions. Federal law, primarily the Federal Records Act, requires that agencies retain agency records under an established schedule.  Agency records, can be written or in electronic.  Documents and electronic mail messages, for instance, can be agency records.  The form and amount of agency record-keeping have implications for the confidentiality of records in federal agency dispute resolution in two basic areas: first, records generated by alternative dispute resolution programs in agencies, and second, records an agency maintains in its official files as a party to a dispute resolution proceeding.  The former category may apply to internal workplace programs run by a single agency, a statutory ADR program run by a single agency, or a shared neutrals-type program run by one or more agencies.

Under the Federal Records Act, an agency is required to retain documents that qualify as records.  The agency must also establish a record retention schedule for a specific duration, one year to permanent.

**Records are defined quite broadly under the Act and regulations.**  Most important, whether private entities or persons outside the agency may have access to agency records is governed by the Freedom of Information Act.  In other words, an agency's legal obligation to retain records is an entirely separate question from whether a record may be disclosed to a member of the public or private entity.  Federal law may require dispute resolution documents to be retained under certain circumstances discussed below, but these requirements do not affect their confidential status.  Nonetheless, even though agency records maintained in its ADR program or ADR records maintained by the agency as a party to the dispute resolution proceeding are confidential to the outside world, the question of who has access to these records within the agency and the government may still affect the parties' expectations of confidentiality and effective ADR practice for the agency. 

For these reasons, understanding the potential scope of the Federal Records Act for specific types of ADR documents and for neutrals is important.  

**The Federal Records Act and ADR Records**

Two questions arise under the ADR Act:

· What impact, if any, does the Act have on the mediator's obligation to retain records?

· What impact, if any, does the Act have on a government party's obligation to retain documents given to her/him by the mediator?

For private mediators who are by definition not government employees, there is probably no obligation to retain records unless a contract explicitly declares that the documents generated by the mediator are agency records.  For agency employees whose official job duties include serving as an ADR neutral (e.g. when the agency has set up an official duty office of dispute resolution), it depends on how each agency defines what is an agency record.   The basic principle for neutrals who are government employees is that, if a neutral circulates a document to the participant(s), then it is more likely the document will be deemed an agency record.  For example, (assuming the mediator is a federal employee whose job duties include serving as a neutral) a mediator's rough notes which are not circulated to any person may be considered working files which are not agency records.  (See 36 CFR §1222.34(c))  Rough notes for the mediator’s eyes’ only or, in other words, memory joggers are more likely to be deemed not to be agency records.   For government employees who are parties to a dispute resolution proceeding and have documents given to them by the neutral or another party, these documents would likely be agency records under the Act and the government employee would have the obligation to retain this record (e.g. an evaluation by a mediator) according to the agency retention schedule unless the government employee returns the documents to the neutral or other party.

These general principles apply regardless of the type of document: written or electronic, neutral notes, documents exchanged between the parties, settlement agreements, or program evaluations.  With respect to settlement agreements, such documents are most likely to be deemed agency records by most agencies, and thus subject to retention.  Settlement agreements with the government, however, are usually not confidential in that outside parties may request such agreements under the Freedom of Information Act, and the Administrative Dispute Resolution Act specifically exempts settlement agreements from its confidentiality provisions (as it does agreements to conduct ADR).

**Practical Concerns for Confidentiality**

As noted above, despite the fact that the record retention requirements by their own terms do not affect the confidentiality of ADR records with respect to private persons and entities who are not parties to the dispute resolution proceeding, there are other kinds of confidentiality and ADR practice concerns.  How widely accessible ADR records are within an agency may impact parties' expectations of the program and confidentiality.  Greater amounts of records generated or retained, and larger numbers of personnel (among agencies or within an agency) having access, may also increase the chances of inadvertent disclosure to private persons or entities.  Furthermore, the more records are stored in electronic form and the more "confidential" data is conveyed via e-mail, the more likely there will be a greater number of agency personnel who have access to ADR data.  Thus, agency record-keeping of ADR documents raises "practical" confidentiality concerns (access within and among agencies, and inadvertent disclosure to private entities and persons) and effective ADR practice concerns.

**Recommended Goals and Strategy**

Given these practical concerns, when an employee has ADR documents because the agency is a party to an ADR proceeding, and these documents are likely to be agency records and hence retained under the Federal Records Act for a specified period of time, it is recommended that the employee mark these records as "confidential ADR documents, not to be disclosed."   It is also advisable that agencies diligently monitor the retention schedule for these files and destroy these files expeditiously once the legal retention period is over. 

By the same token, the goal for record-keeping for agency ADR programs should be to balance accountability for ADR programs with effective program management (i.e., the delivery of effective, high quality neutral services) and the risk of improper disclosure.   To minimize the latter risk and maximize the former two goals, an agency should:

· distinguish between parties’ relationship to non-identifiable data v. identifiable

· clarify practices to customers 

· train employees who  handle confidential data 

· analyze who has access to raw data, as opposed to summary data

Obviously, the more a party’s identity in relation to ADR data is kept anonymous, the more confidentiality is preserved on a practical level: fewer personnel have less knowledge of the sensitive data.  The same true is for summary data as opposed to raw data.    

Program administrators should analyze the range of personnel or people who perform “intake,” whether in an official or incidental capacity (e.g., temporary employees, telephone receptionists, those on cc: e-mail lists, those with access to faxes).  Program administrators should engage in a structured effort to streamline the intake process to minimize the number of people who can access intake information.  Program administrators should also collect only information that is necessary.  At this point, program administrators should determine, and develop policies as to, which records and information should be available and to whom, based on information such as: whether data contains  information identifying the dispute or source, or just tracking information, and what the legal records retention and destruction constraints are. (e.g., FRA, FOIA, Privacy Act, state laws)  Finally, agencies should assess and address possible inappropriate disclosure through computer usage (e.g., e-mail and data bases) by consulting with information technology experts.

Thus, the recommended goals for agency ADR programs are to:  minimize the number of persons who have access to agency records that identify the dispute; allow more  access to agency records that do not identify the dispute and contain just tracking information; and develop software that permits access only to authorized personnel consistent with delivery of effective and high quality ADR services.

**Chapter 8**

# Confidentiality

# in

# Evaluating 

# ADR Programs,

# Processes, and Neutrals

Overview 

Legal Context

*ADR Act*

*Freedom of Information Act generally*

*ADR Act exemption from FOIA*

*Other potential FOIA exemptions*

Considering Confidentiality in Performing an Evaluation

*Initial analysis*

*Identifying an evaluator*

*Informing parties and neutrals about evaluations*

*Safeguarding information*

**Overview**

An effective ADR program will include an evaluation component in its design to determine whether its goals and objectives are met.  Especially with the implementation of the Government Performance Results Act and other recent initiatives promoting program effectiveness and accountability, evaluation mechanisms for ADR programs may play a critical part in decisions to continue a program, modify it, or adjust resources.  

There are two primary types of evaluation:   (1) program evaluation, which focuses on the degree to which an ADR program is meeting its goals; and (2) process evaluation, which looks at whether or not a program as implemented is delivering services as it should be and how delivery can be improved.  Process evaluation mechanisms are especially likely to raise immediate confidentiality concerns, since they often involve evaluation forms completed by parties, mediator feedback forms, and other tools frequently include information of a highly sensitive nature that should be handled with extreme care.  Program evaluations, although primarily based on numerical data (such as whether the use of ADR reduces the time it takes to resolve disputes), can also pose confidentiality challenges, because evaluators sometimes use raw data and interviews.  It should be noted that process evaluation information may be an element in a comprehensive program evaluation.  Care should be taken by both the program administrators and the evaluator to ensure that confidential information is protected.

With respect to both types of evaluation, the ADR Act does not protect evaluation reports or results from disclosure and may offer limited protection for some raw data.  Still, practical mechanisms can be employed to promote sensitive data handling and preserve the privacy of information collected during the course of an evaluation.  This *Guide* seeks to help ADR program administrators obtain appropriate protection of data collected for evaluation.

**Legal Context**

**ADR Act.**  The Administrative Dispute Resolution Act explicitly acknowledges the importance of research and education concerning use of alternative dispute resolution techniques.  It provides that the Act's general prohibition against disclosure of DR communications does not prevent the gathering of information for research or educational purposes, so long as the parties' identities and the specific issues in controversy are not identifiable.  A session or administrative neutral or a party to a dispute may participate in an evaluation of a program or particular DR proceeding subject to these limits. 

While the ADR Act permits the collection of otherwise confidential information for evaluation purposes, it does not guarantee that all such information relating to evaluation of federal agency ADR processes—once collected—will be protected from disclosure.  Thus, anyone undertaking evaluation activity should be aware of potential risks and take steps to minimize the possibility of inappropriate disclosures.

**Freedom of Information Act generally.**   Evaluation information in the hands of a federal agency likely will be subject to disclosure under the Freedom of Information Act, unless another exemption from FOIA disclosure requirements applies.  In general, FOIA requires that federal agencies disclose information requested by the public in accordance with the statute, unless the information is exempt from disclosure under a specific FOIA provision.  Thus, if an agency receives a request for evaluation information in its possession, it will need to determine whether any of the material is exempt from disclosure under FOIA. 

**ADR Act exemption from FOIA.**  One FOIA exemption is 552(b)(3), which provides that FOIA does not apply to matters that are specifically exempted from disclosure by another statute.  The ADR Act is itself such a statutory exemption from FOIA, but only for “a dispute resolution communication which is between a neutral and a party and which may not be disclosed” under Section 574 of the ADR Act. 

While there appear to have been no court decisions so far on this question, it appears unlikely that all communications for evaluation purposes would be exempt from FOIA under the ADR Act exemption.  Communications for evaluation purposes even if between a party and a session or administrative neutral—may not be confidential, unless they were solicited and provided during the course of the DR proceeding itself.

**Other potential FOIA exemptions.**Even****if the ADR Act’s exemption from FOIA of most DR communications does not apply to many communications for evaluation purposes, other possible exemptions may prevent disclosure of certain evaluation information in an agency's possession.  While a thorough discussion of exemptions with possible application to evaluation materials is not possible here, administrators, evaluators, and those who handle FOIA requests should consider possible application of these exemptions.  Upon receipt of a FOIA request for evaluation records in its possession, the agency would need to analyze the application of each of these exemptions to its records to determine whether any evaluation-related material is exempt.  

**Considering Confidentiality in Performing an Evaluation**

**Initial analysis.**In designing an evaluation, collecting and assessing data, and reporting results, collection methodologies should consider some basic questions regarding which information is and is not deemed confidential:

· Which information is being collected for evaluation, and by whom?

# · Is evaluation information protected under the ADR Act?

# · Which other authorities should an ADR program administrator consider besides the ADR Act?

# · Which steps should a program administrator take to maximize confidentiality while designing an evaluation, conducting it, and reporting results?

Program administrators may need to balance effective evaluation of DR programs against the risks of potential disclosure of data gathered.  Anyone sponsoring or undertaking to evaluate a dispute resolution process involving a federal agency should—before starting to collect information—carefully consider both the types of information that will be sought and the type of process used.  Administrators and evaluators should avoid collecting data that could identify specific parties or issues in controversy.  Because evaluation information in the hands of federal agencies may not be exempt from disclosure under FOIA, the collection of confidential or sensitive information should be avoided if possible. 

**Identifying an evaluator.**  It may sometimes be worth considering using the services of a private evaluator to reduce the risk of disclosure of evaluation information.  If an evaluation of federal ADR processes is conducted by a non-federal entity, the evaluation data may not qualify as an agency record for purposes of FOIA.  Information collected by a private evaluator that is not included in an evaluation report or otherwise given to the agency would not be subject to FOIA.  Evaluation records held by non-federal entities but generated with federal funding may be subject to FOIA, depending on the specific circumstances, including whether the federal government has access to the records.  Of course, the evaluation report or any documents that the evaluator makes available to the agency would be subject to FOIA absent an exemption. 

**Informing parties and neutrals about evaluations.**  Since parties are more likely to provide data if they understand the importance of an evaluation and how it will be used, program administrators and evaluators should:

· Include on evaluation surveys a statement of the purpose of collecting the information, the level of protection that will be accorded, and how the data will be used.  (An example of a possible statement is, “We will appreciate your completion of this questionnaire. The information will be used only for evaluation purposes. In order to protect confidentiality, comments will never be attributed to individuals.")

· Include notice that there may be evaluations of the DR program in the information packet given to program participants

· Request parties' and neutrals' consent to their participation prior to conducting any evaluation

· Advise neutrals and parties that they may, but need not, participate in an evaluations

· Advise neutrals and parties to give only necessary information and avoid giving sensitive information not necessary for evaluation

· Make sure that the neutral and the evaluator understand the ADR Act's confidentiality provisions, including its section relating to collection of information for research or educational purposes, and any other relevant agency policies 

**Safeguarding information.**  Given the possibility of disclosure of confidential information collected in an evaluation process, it is advisable for evaluators to set up procedures to minimize the risk that sensitive data will become publicly available.  Among the steps that should be considered are:  

· Avoid collecting sensitive information in the first place

· Do not ask for more information than is reasonably needed

· Remove personal identifiers prior to transmitting data to an evaluator

· If an evaluation contractor is collecting or analyzing data, ensure that the contract specifies clearly how data will be employed, limits agency access to it to the maximum extent possible, and addresses disposal of any raw data following completion of the evaluation

· Provide for aggregation of data as soon as possible, anonymity of respondent surveys, and coding of intake information (e.g., individual case names and issues involved) to secure anonymity

· Limit access to evaluation data, for instance by keeping case-sensitive information in a locked file or creating a "firewall" protection

· Separate sensitive and non-sensitive information

· Save raw data for only as long as necessary to complete the evaluation process (consistent with any applicable records retention guidelines)

# · Use common sense

**Chapter 9**

**Handling**

**Access**

**Requests**

Handling Access Requests under the ADR Act

*The ADR Act’s requirements*

*Relation to other laws*

*Handling cases presenting competing authority*

Agency Procedures, Guidance, and Agreements

*Treating dispute resolution communications as sensitive*

*Minimizing and handling divergences*

*Agreements with agency Inspectors General*

*Internal regulations or guidance*

*Detailed guidance*

**Handling Access Requests under the ADR Act**

Access requests, while infrequent, come in a variety of forms and, if not handled carefully, can seriously impair an ADR program’s credibility and success.  Disclosures may be sought for a number of reasons ranging from idle curiosity to serious investigation:

· A session neutral’s or administrative neutral’s supervisor, a political appointee, or personnel from elsewhere in the agency may seek information about protected communications made during a DR proceeding that the neutral is not free to disclose

· A party or judge may seek a neutral’s notes or testimony in a case involving alleged misleading statements or bad faith negotiation by one party

· An Office of Inspector General or other investigator may seek sensitive data relating to investigation of fraud, waste, or abuse relating to an agency program

· A grand jury investigation may seek information from a neutral

With most inquiries and requests for access to confidential DR communications, the intake or session neutral's response is likely to be straightforward: the ADR Act precludes disclosure unless authorized by a statutory exception.  Still, a presumptive no-disclosure policy does not mean that a neutral or program administrator should categorically reject all information requests.  Some requests will seek non-protected information or communications that parties and neutrals do not object to sharing.  Whoever the requestor and whatever their claimed basis for seeking disclosure, a request for protected DR communications should be handled respectfully and with recognition of the important missions and functions of other agencies and staff.  This means:

· explaining to a requester the ADR Act’s prohibition against disclosure and procedural requirements, and the reasons for them, 

· putting in place sound methods for considering requests systematically (see below), and

· seeking mutually agreeable methods for handling requests that avoid, or at least minimize, infringement of any party's reasonable expectation of confidentiality. 

**The ADR Act’s requirements.**The Act's prescribed procedure for handling those requests—which has been employed in only one or two cases since the Act’s passage in 1990—seeks to balance open government, oversight concerns, evidentiary requirements, and confidentiality needs.  As discussed in Chapter 4, whenever disclosure is sought from any session or administrative neutral, the Act re​quires prior notice to parties, an opportunity to contest disclosure, and judicial balancing subject to stat​ed criteria. 

When a court is asked to order disclosure of DR communications that are arguably protected under the Act, a judge ensures that parties have been given a chance to object to disclosure and then undertakes a careful balancing using the Act’s criteria (Section 574(a)(4); 574(b)(5)).  Disclosure or testimony can be ordered when the court finds the magnitude of the need for disclosure in a particular case sufficient to outweigh the integrity of dispute resolution processes, in general.  

The ADR Act contains other protections.  If the disclosure involves information that is required by statute to be made public, the Act requires anyone seeking confidential information to try initially to obtain it from parties or other sources before looking to the neutral.  Neutrals who are requested to disclose protected documents must make an effort to notify the parties of a demand for disclosure, and a party that does not offer to defend a neutral’s refusal to disclose is considered to have waived any objection. 

**Relation to other laws.** While the Act’s policy against disclosure of dispute resolution communications is clear, the resolution of conflicts with other laws and policies involving access to government information has not been decided judicially.  Occasions may arise when a party or other entity will ask, or seek to compel, a neutral to divulge DR communications under claims that their request supersedes any restrictions on disclosure imposed by the ADR Act.  In particular, a number of federal entities are authorized to request disclosure of certain documents from federal agencies and employees.  Further, certain statutes may be read to impose an affirmative obligation on government employees (or even private persons) to disclose certain classes of information.

Examples of statutes affecting government employees include, but are not limited to, the Inspector General Act of 1978 (the IG Act) and the Whistleblower Protection Act.  IGs obtain documents in their own agencies pursuant to Section 6(a)(1) of the IG Act, which authorizes IGs to, “have access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available to the applicable establishment which relate to programs and operations with respect to which that Inspector General has responsibilities under this Act.”  When IGs need documents or information in their own agencies, they direct the agency or employee to provide the documents or information.  For example, if an IG wishes to obtain documents from an agency employee in his own agency, he would seek access to the documents pursuant to (6)(a)(1).  An IG in one federal agency requiring documents or information from an employee employed by another federal agency, or a State or local entity, may request that agency or entity provide the documents or information pursuant to the comity provision at 6(a)(3).90 

Upon an IG’s request for information or assistance from the head of another federal agency, Section 6(b)(1) of the IG Act provides that the head of that agency shall, “insofar as practicable and not in contravention of any existing statutory restriction or regulation of the Federal agency from which the information is requested, furnish to such Inspector General, or to an authorized designee, such information or assistance.”

The IG Act generally authorizes IGs to subpoena documents from private parties.  IGs have no testimonial subpoena authority, nor may they use their administrative subpoena authority to obtain documents and information from federal agencies.  Accordingly, if an IG wishes to obtain documents from a private neutral, he may issue a subpoena.  If the private person fails to comply, the IG may seek enforcement of the subpoena.  At this juncture a court would presumably apply the procedure and standards for compelled disclosure under the ADR Act in deciding whether to enforce the subpoena. 

In cases involving private sector neutrals, the ADR Act’s procedures and standards will be available.  However, situations may arise from time to time in which an agency OIG or a similar office seeks DR communications from neutrals employed by their own agency, to whom they may lack authority to issue an administrative subpoena.  The procedures suggested below generally would apply only if the neutral or party is an agency employee. 

**Handling cases presenting competing authority.** Some disclosure proponents see authority (like an IG's) to "have access to all records, reports, audits, reviews, documents, papers, recommendations or other material available to the establishment," as taking precedence over the ADR Act's protections. They cite a statutory mandate to carry out investigative activities, and note that the DR communications could sometimes be vital to fulfilling it.  Moreover, they suggest, a communication that evidences fraud, waste, abuse, corruption, a violation of law, or a threat of imminent danger or serious harm, is not a communication “provided under circumstances that would create a reasonable expectation that it not be disclosed."  Some disclosure proponents say that the ADR Act was never intended to act as a shield for criminal activity, or that it should be limited to routine civil matters and not apply to data sought for governmental or criminal investigations.

Additionally, disclosure proponents stress that there are few cases in which disclosure of confidential communications has been an issue.  They state that if such a case were to arise, the IG Act's less demanding disclosure standard should prevail, with access to agency records permitted without requiring the ADR Act's showing of “sufficient magnitude” of need or balancing that need with the overall “integrity of dispute resolution proceedings.” 

Those who advocate the ADR Act's taking precedence have pointed out that permitting broad access may chill "open and frank" discussions, undermine the significant public policy in favor of resolving issues through settlement, and produce little useful data.  Supporters of ADR confidentiality point out that the ADR Act's approach promotes impartial determinations regarding access by: (1) removing difficult disclosure decisions from the hands of neutrals and agency personnel; and (2) placing them with federal courts rather than in the hands of the person seeking the information.  They note that: (1) the Act promotes an important government policy favoring resolution of regulatory conflicts; (2) the Act places extensive limits on access to DR communications; (3) only rarely will an investigation's outcome turn on a particular confidential communication available solely to the neutral; and (4) the interests of those seeking access to DR communications and those concerned with maintaining DR processes’ integrity can almost always be accommodated through discussion. 

A few individuals on both sides of the disclosure debate see possibilities for meshing investigative needs and the integrity of ADR processes.  Some of them cite a Federal District Court in Michigan that sought such an accommodation in a case involving a motion to quash a USDA OIG subpoena seeking bank account information protected by the Right to Financial Privacy Act.  The court stated that, under this Act, the ultimate burden for showing that the records sought were relevant to a legitimate law enforcement need fell upon the government.  Declaring an IG's "official curiosity" inadequate groun​ds for obtaining access to protected documents, the court required a detailed needs justification from the government.  It then found that the IG's application met the requirements set forth in the Right to Financial Privacy Act.  Supporters of this decision note that the court appropriately required the IG to establish its needs under specifically applicable federal law before a neutral judge, rather than use the court merely to enforce the IG's subpoena. 

### At times, there may be a problematic relationship between the ADR Act and the IG Act.  On the one hand, the language of the IG Act can be interpreted broadly, and IG functions are important to the effective functioning of the government and protecting the public interest.  On the other hand, if the ADR Act's standards and procedures were bypassed whenever an IG requires DR communications as part of a criminal investigation, prospective parties to ADR in many federal agencies would worry that their communications might later be used against them and decide to avoid mediating with the government altogether.   Canons of statutory construction can be used to support either side of the debate.  This Guide does not attempt to resolve the debate, but rather offers some practical solutions and suggested model procedures (below) that will minimize clashes between, and harmonize the missions of, agency ADR programs and IG investigations.

### Agency Procedures, Guidance, and Agreements

**Treating dispute resolution communications as sensitive.**The IG Act and derivative agency policies may present occasional inconsistencies with the ADR Act provision preventing neutrals and parties from disclosing any "DR communications."  This issue will never arise when a neutral is a private practitioner, since nothing constrains IGs or other investigators' authority to issue administrative subpoenas or go to court to seek data from non-agency sources.  Agency procedures for handling requests for access to DR communications should recognize that release is a sensitive subject.  As such, regulations or other guidance should provide for prompt, consistent action giving effect to the confidentiality requirements of the law, parties' reasonable expectations, and investigative needs in extraordinary cases.

**Minimizing and handling divergences.**  In fact, direct conflicts between the Act and another statute affecting disclosure duties will be quite rare.  However, it is important that federal ADR program administrators and neutrals not be forced to choose between arguably conflicting duties.  The ADR Act, as stated, generally requires nondisclosure.  Agencies should be prepared for those rare instances where the judicial override procedure is not available to decide the disclosure request.  Agencies can assist ADR program administrators by establishing a presumptive no-disclosure policy and a procedure for an impartial balancing.  ADR program administrators and neutrals should know and follow clear confidentiality procedures, given that their relative familiarity with ADR confidentiality laws and IG rights to access and cooperation will vary considerably among federal agencies.  

Since requests for dispute resolution communications, if not handled sensitively, could jeopardize relations between DR functions and others in their agencies seeking disclosure, it is advisable to engage those functions or agencies, explain the policy, develop a process to handle any requests for DR communications, and establish good working relationships to minimize potential conflicts.  The Federal ADR Council, in its December 2000 guidance, has recommended that agency ADR programs take these practical steps to minimize the likelihood of disclosure disputes:

· Agency ADR programs and agency entities that might conceivably make data requests should educate each other about their respective missions.

· Agency ADR programs should identify classes of information that are not confidential, such as budgetary and statistical information regarding the number and types of cases and processes used.

· A requesting entity should seek confidential information from a neutral only if the information is not available through other means.

**Agreements with agency Inspectors General.**The agency Dispute Resolution Specialist and the agency IG may seek an agreement on procedures for IG requests for disclosure of dispute resolution communications. These procedures might provide, for instance, that the IG will try initially to obtain DR communications from parties before looking to the neutral. They could also encourage providing needed data in a way that does not identify the parties and the specific issues in controversy.  Ideally, these procedures should be made part of the agency’s ADR policy and refer to an agency’s policies for reporting to and cooperating with the IG.

**Internal regulations or guidance.**Agencies should ideally publish internal guidance or regulations to provide appropriate protection for DR communications.  In the event that a compelling governmental need requires that an agreement governing access to DR communications be incompatible with the disclosure limits and structure of the ADR Act, then (1) all parties and the neutral should be clearly informed at the very outset of a DR proceeding and (2) all parties and the neutral should have an opportunity to decide whether to continue.

Where a requester seeks to subpoena communications involving a neutral, the Act's court balancing process will presumably apply.  For cases in which an IG or other authorized requester lacks subpoena power, agency programs should  provide for a review process that observes these fundamental principles:

· Session and administrative neutrals should respond consistently to all disclosure requests.

· Procedures for access should identify an individual responsible for receiving and initially handling  requests, and  provide for coordination with all parties to the dispute resolution proceeding.

· Session and administrative neutrals and agency Dispute Resolution Specialists should not be permitted, or required, to decide on their own whether to disclose sensitive DR communications.

· The process for addressing any disclosure decision should be (1) systematic, (2) objective, and (3) set forth in advance of an access request being received.  When disclosure is under consideration, this process should afford direct and prompt access to an independent decider (e.g., an Administrative Law Judge) or the agency head, whose decision should embody a reasoned balancing test based on the approach to determining the propriety of disclosure in Section 574(d)(4) of the ADR Act.

· Requesters should be encouraged to seek information from non-confidential sources first.

· Procedures should recognize variations among internal and external neutrals.

**Detailed guidance.**  Ideally, agencies should announce in advance their intent to employ a specified procedure for addressing disclosure requests.  One suggested procedure is set forth in Appendix 3.

**Chapter 10**

**Conclusion**

Since Congress first enacted the Administrative Dispute Resolution Act in 1990, ADR has flourished in parts of the federal government: in terms of neutrals trained, programs established, and sessions conducted.  Certain government entities have even made ADR a core part of their mission. 

 On the other hand, internal and external influences have not always shaped the practice of ADR in the federal government in a positive way.  Some of these influences directly impact confidentiality practices and expectations.  For instance:

· Computers and other technology innovations have changed the way we work and greatly enhanced communication and productivity, but they have also created new vulnerabilities in maintaining confidentiality.

· While the legislation’s drafters probably expected that most mediations would be conducted by outside mediators, hundreds of federal employees have been trained in mediation and now serve as a major source of ADR neutrals.  These neutrals are subject to certain laws and practical realities that may affect, or sometimes even limit, the confidentiality protections envisioned by the Act's drafters.

· The underpinnings of sound ADR practice and administration have sometimes been overlooked, misunderstood, or even given short shrift.

As the ABA Ad Hoc Committee on Federal Government ADR Confidentiality began preparing this *Guide*, it saw a need to consider federal ADR programs as systems for handling conflict.  Thus, the *Guide* seeks to address confidentiality and disclosure practices in an orderly way and from different perspectives: during case intake and assessment, in the identification of neutrals, during core ADR sessions (e.g., mediation joint sessions and caucuses), and in subsequent follow-up (including record-keeping, evaluation and clearance processes used by agencies to put an agreement in place).  Taking a careful approach like this will be important for agencies and others as they implement or review their programs. 

The Confidentiality Committee does not expect that this *Guide* will end discussion or disagreement about these often-complex matters.   That said, it is critical that all federal ADR programs and neutrals deal systematically, thoughtfully, and comprehensively with confidentiality and other key issues.  They must also ensure that their clients and others with whom they deal have a basic understanding of ADR processes, how they work, the important role of confidentiality, and applicable laws affecting sensitive communications made in ADR.   If this happens, day-to-day activities will be informed by good practice and will reinforce the goal of improving government decision-making.

**Appendices**

Appendix 1.  Federal ADR: A Glossary

Appendix 2.  Administrative Dispute Resolution Act, 5 U.S.C. Sections 571, 574

Appendix 3.  Possible Access Requests Model Procedure

Appendix 4.  Federal ADR Confidentiality Guidance Documents

**Appendix 1**

**Federal ADR:**

**A Glossary**

**Administrative program.** A broad term generally including any federal agency regulatory activity.  This might involve protection of the public interest or determination of rights, privileges, or obligations through rulemaking, formal or informal adjudication, licensing, enforcement, investigation grants, contracts, cooperative agreements, or other transactions. (See §571(2)).

**Alternative means of dispute resolution****(or ADR).** Any procedure involving a *neutral* that is used as an alternative to a hearing, trial, or other more formal procedure to resolve an *issue in controversy*, including, but not limited to, *facilitation*, *mediation*, *fact finding*, *minitrials*, *ombuds*, *arbitration*, or any combination.  ADR processes emphasize creativity and cooperation in place of adjudicative means of problem solving.  (See §571(3)).

**Arbitration.** An ADR process in which the disputing *parties* present their case to one or more *neutrals* (“arbitrators”), who hear evidence and argument and render a decision or award on the merits (binding or non-binding).  Arbitration differs from *mediation* and other *ADR processes* in which the neutral helps the disputing parties develop a solution on their own.

**Caucus.** A private meeting or series of separate meetings in a *DR proceeding* that take place between the neutral and one or more, but not all, participants.  Many *mediators* and other ADR *neutrals* sometimes work in private caucuses with *parties* to give them a chance to explore acceptable resolution options, develop or clarify proposals and interests, or move closer to resolution.  A “joint session,” by contrast, includes all parties and the ADR neutral.

**Dispute resolution (DR) communication.** Any oral, written, or electronic communication prepared for the purposes of a *dispute resolution proceeding*, including memoranda, notes or work product of the *neutral*, *parties* or *non-party participant*.  The term “DR communication” includes documents, statements (whether oral or in a record), pictures, other tangible items, and conduct meant to inform that relates to a DR proceeding.  Given the ADR Act’s broad definition of *neutral* and the critical importance of candor during initial conversations to insure a thoughtful agreement to employ ADR, it includes communications made for purposes of retaining a *session neutral* or considering, initiating, conducting, participating in, or continuing a DR proceeding.  A written agreement to enter into a dispute resolution proceeding or final written agreement or arbitral award reached as a result of a dispute resolution proceeding is not a dispute resolution communication. (See §571(5)).

**Dispute resolution (DR) proceeding.** Any process in which an *alternative means of dispute resolution* is used to resolve an *issue in controversy* in which a *neutral* is employed and specified *parties* participate.  These may be administrative, arbitral, or other formal or informal agency adjudicative processes. (See §571(6)).

**Facilitation.** A collaborative process involving the use of techniques to improve the flow of information in a meeting.  In it, a neutral facilitator seeks to assist a group to discuss issues constructively and provides procedural direction to help the group move through a problem-solving process to arrive at a jointly agreed-on goal.  While facilitation bears many similarities to *mediation*, and while facilitation techniques may be applied to decision-making meetings where a specific outcome is desired (e.g., resolution of a conflict or dispute), the neutral in a facilitation process (the “facilitator”) often plays a less active role than a mediator.  The ADR Act will apply only when the facilitator aids with "resolution" of an *issue in controversy*.  The term "facilitator" is often used interchangeably with the term "mediator," but a facilitator typically does not become as involved in the substantive issues.****

**Fact-finding.** An *ADR process* in which a *neutral* fact-finder receives information and arguments from the parties about the issues and facts in a controversy (and may conduct additional research to investigate the issues in dispute), and then submits a report with findings of fact and perhaps recommendations based on those findings. 

**In confidence.** Information that is provided: (A) with the expressed intent of the source that it not be disclosed, or (B) under circumstances that would create the reasonable expectation that the information will not be disclosed. (See §571(7)).

**Issue in controversy.** An issue that is material to a decision concerning an agency *administrative program*, and about which there is disagreement:

(A) between an agency and persons who would be substantially affected by the decision; or

(B) between persons who would be substantially affected by the decision. (See §571(8)).

**Joint session.** A meeting in a *DR proceeding* that (unlike a *caucus*) includes all *parties* and the *ADR neutral*.

**Mediation.** An *ADR process* in which a *neutral* third party (a “mediator”) with no decision-making authority seeks to assist the *parties* in voluntarily reaching an acceptable resolution of *issues in controversy*.  While mediators differ in their methods of assisting disputing parties, the mediator typically enables the parties to initiate progress toward their own resolution.  A mediator enhances negotiations by improving communication between parties, identifying interests, and exploring possibilities for a mutually agreeable resolution. 

**Minitrial.** A structured *ADR process* in which the *parties* seek to reframe issues in controversy from the context of litigation to the context of a business problem.  Typically, attorneys for each party make summary presentations to a panel consisting of a *neutral* minitrial advisor and non-lawyer party representatives who possess settlement authority. The panel then attempts to *negotiate* a resolution of the issues in controversy.

**Negotiated rulemaking.**  A multi-party consensus process used as an alternative to the traditional notice-and-comment approach to issuing regulations, in which agency officials and affected private representatives meet under the guidance of a *neutral* (much like a mediator) to engage in *negotiation* and draft a proposed agency rule, policy, or standard.   The public is then asked to comment on the resulting proposed rule.  By encouraging participation by interested stakeholders, the process makes use of private parties' perspectives and expertise, and can help avoid subsequent litigation over the resulting rule.

**Negotiation.** A process of discussion and give-and-take in which disputants communicate their differences to one another through conference, discussion and compromise, in order to resolve them.

**Neutral (or ADR Neutral).** An individual who functions specifically to aid the parties in a *DR proceeding* to resolve an *issue in controversy*.  Depending on his or her function at a given time, an ADR neutral may be an administrative neutral/program neutral, a session neutral, or a convening neutral:

· An *administrative neutral* (or program neutral) typically conducts the day-to-day administration of an ADR program, including intake, assistance in identifying and obtaining session neutrals, record-keeping, establishment of evaluation mechanisms, and offering parties aid and advice.  

· A *session neutral* assists the parties during and between negotiation sessions in exploring options, identifying common interests, and resolving their dispute. 

· A *convening neutral* (or convenor) typically confers with potentially interested persons regarding a situation involving conflict to: identify the issues in controversy and all affected interests, determine whether direct negotiations would be suitable, educate parties about the DR process, design the structure of a DR process to address the conflict, and possibly bring the parties together to negotiate.  (See §§571(9) and 573).

**Neutral evaluation (or Early neutral evaluation).** An *ADR process* in which the *parties* and their counsel present the factual and legal bases of their case to a *neutral* evaluator—often someone with specifically relevant legal, substantive, or technical expertise or experience—who then offers a non-binding oral or written evaluation of the strengths and weaknesses of the parties’ cases.  This evaluation can form the basis for settlement discussions facilitated by the neutral evaluator if the parties so choose.  

**Non-party participant.** Experts, friends, support persons (including lawyers), potential parties, and others who participate in the *mediation* or other *DR proceeding* but are not *parties*.

**Ombuds.**  Person who receives complaints and questions from individuals concerning  others within an organization.  They rely on a number of *ADR processes* to resolve disputes, including *mediation*, *conciliation*, and *fact-finding*.  When an ombuds receives a complaint, he or she may conduct interviews, review files, and make recommendations to the disputants.  Ombuds do not impose solutions.  

**Party.** For an agency *DR proceeding* with named *parties*, a person or agency named or admitted as a party in the proceeding, and a person or agency admitted by an agency as a party for limited purposes.  For an agency *DR proceeding* without named *parties*, a person who will be significantly affected by the decision in the proceeding and who participates in it. (See §571(10)).

**Person.** An individual, partnership, corporation, association, or public or private entity other than an agency. (See §571(11)).

**Settlement judge.** An *ADR process* in which a judge—different from the presiding judge in the case—meets with the parties jointly and separately, acting as a mediator or *neutral* evaluator in a case pending before a tribunal.   

# Appendix 2

# Administrative

# Dispute Resolution

# Act,

# 5 U.S.C. Sections 571, 574

# \

# United States Code

**Title 5, Chapter 5, Subchapter IV**

**Alternative Means of Dispute Resolution in the Administrative Process**

**5 U.S.C. 571.  Definitions.**

For the purposes of this subchapter, the term—...

(3) “alternative means of dispute resolution” means any procedure that is used to resolve issues in controversy, including, but not limited to, conciliation, facilitation, mediation, fact finding, minitrials, arbitration, and use of ombuds, or any combination thereof;...

(5) “dispute resolution communication” means any oral or written communication prepared for the purposes of a dispute resolution proceeding, including any memoranda, notes or work product of the neutral, parties or nonparty participant; except that a written agreement to enter into a dispute resolution proceeding, or final written agreement or arbitral award reached as a result of a dispute resolution proceeding, is not a dispute resolution communication;

(6) “dispute resolution proceeding” means any process in which an alternative means of dispute resolution is used to resolve an issue in controversy in which a neutral is appointed and specified parties participate;

(7) “in confidence” means, with respect to information, that the information is provided—

(A) with the expressed intent of the source that it not be disclosed; or (B) under circumstances that would create the reasonable expectation on behalf of the source that the information will not be disclosed;

(8) “issue in controversy” means an issue which is material to a decision concerning an administrative program of an agency, and with which there is disagreement—

(A) between an agency and persons who would be substantially affected by the decision; or

(B) between persons who would be substantially affected by the decision;

(9) “neutral” means an individual who, with respect to an issue in controversy, functions specifically to aid the parties in resolving the controversy;

(10) “party” means—

(A) for a proceeding with named parties, the same as in section 551(3) of this title; and

(B) for a proceeding without named parties, a person who will be significantly affected by the decision in the proceeding and who participates in the proceeding;...

**5 U.S.C. 574.  Confidentiality.**

(a) Except as provided in subsections (d) and (e), a neutral in a dispute resolution proceeding shall not voluntarily disclose or through discovery or compulsory process be required to disclose any dispute resolution communication or any communication provided in confidence to the neutral, unless—

       (1) all parties to the dispute resolution proceeding and the neutral consent in writing, and, if the dispute resolution communication was provided by a nonparty participant, that participant also consents in writing;

       (2) the dispute resolution communication has already been made public;

       (3) the dispute resolution communication is required by statute to be made public, but a neutral should make such communication public only if no other person is reasonably available

to disclose the communication; or

       (4) a court determines that such testimony or disclosure is necessary to—

(A) prevent a manifest injustice;

(B) help establish a violation of law; or

(C) prevent harm to the public health or safety

of sufficient magnitude in the particular case to outweigh the integrity of dispute resolution proceedings in general by reducing the confidence of parties in future cases that their communications will remain confidential;

(b) A party to a dispute resolution proceeding shall not voluntarily disclose or through discovery or compulsory process be required to disclose any dispute resolution communication, unless—

      (1) the communication was prepared by the party seeking disclosure;

      (2) all parties to the dispute resolution proceeding consent in writing;

      (3) the dispute resolution communication has already been made public;

      (4) the dispute resolution communication is required by statute to be made public;

      (5) a court determines that such testimony or disclosure is necessary to—

(A) prevent a manifest injustice;

(B) help establish a violation of law; or

(C) prevent harm to the public health and safety

of sufficient magnitude in the particular case to outweigh the integrity of dispute resolution proceedings in general by reducing the confidence of parties in future cases that their communications will remain confidential;

      (6) the dispute resolution communication is relevant to determining the existence or meaning of an agreement or award that resulted from the dispute resolution proceeding or to the enforcement of such an agreement or award; or

      (7) except for dispute resolution communications generated by the neutral, the dispute resolution communication was provided to or was available to all parties to the dispute resolution proceeding.

(c) Any dispute resolution communication that is disclosed in violation of subsection (a) or (b), shall not be admissible in any proceeding relating to the issues in controversy with respect to which the communication was made.

(d) (1) The parties may agree to alternative confidential procedures for disclosures by a neutral.  Upon such agreement the parties shall inform the neutral before the commencement of the dispute resolution proceeding of any modifications to the provisions of subsection (a) that will govern the confidentiality of the dispute resolution proceeding. If the parties do not so inform the neutral, subsection (a) shall apply.

      (2) To qualify for the exemption established under subsection (j), an alternative confidential procedure under this subsection may not provide for less disclosure than the confidential procedures otherwise provided under this section.

(e) If a demand for disclosure, by way of discovery request or other legal process, is made upon a neutral regarding a dispute resolution communication, the neutral shall make reasonable efforts to notify the parties and any affected nonparty participants of the demand. Any party or affected nonparty participant who receives such notice and within 15 calendar days does not offer to defend a refusal of the neutral to disclose the requested information shall have waived any objection to such disclosure.

(f) Nothing in this section shall prevent the discovery or admissibility of any evidence that is otherwise discoverable, merely because the evidence was presented in the course of a dispute resolution proceeding.

(g) Subsections (a) and (b) shall have no effect on the information and data that are necessary to document an agreement reached or order issued pursuant to a dispute resolution proceeding.

(h) Subsections (a) and (b) shall not prevent the gathering of information for research or educational purposes, in cooperation with other agencies, governmental entities, or dispute resolution programs, so long as the parties and the specific issues in controversy are not identifiable.

(i) Subsections (a) and (b) shall not prevent use of a dispute resolution communication to resolve a dispute between the neutral in a dispute resolution proceeding and a party to or participant in such proceeding, so long as such dispute resolution communication is disclosed only to the extent necessary to resolve such dispute.

(j) A dispute resolution communication which is between a neutral and a party and which may not be disclosed under this section shall also be exempt from disclosure under section 552(b)(3).

**Appendix 3**

**Possible**

**Access Requests**

**Model Procedure**

**Responsibility of agency official.**Initial handling of all requests for access to dispute resolution communications, as defined in the ADR Act, should be the responsibility of the designated agency ADR Communications Access Officer (CAO).  The ADR CAO will receive all access requests and review them in accordance with the Act and agency procedures. The ADR CAO should initially determine whether the request is for access to "DR communications" protected by the ADR Act.

**Notice of access request.**Any agency official, neutral, or ADR participant who receives a request for access to a DR communication, whether orally or in writing, should promptly contact the ADR CAO and forward a written request expeditiously to the CAO.  The requester should be notified by the ADR CAO, or the individual receiving the access request, that the request has been forwarded to the CAO for review.

**Notification to affected non-participants and the parties.**When the ADR CAO receives a request for access to dispute resolution communications, the CAO should immediately notify the agency dispute resolution specialist and the program administrator for the dispute resolution proceeding.  Further, the ADR CAO should notify the neutral, and all affected parties and other participants, of the request for access.

**Content of request.**After receiving notice of a request for access to DR communications, the ADR CAO should review the request within five working days and, if necessary, contact the requester for additional information and provide guidance on agency procedures for handling disclosure requests.  Any request should explain the legal authority for seeking disclosure, indicate the reasons for the request, and state whether there are other non-confidential sources available for obtaining the communications. 

**Reasonably available from other sources.**The requester should establish that the communications are not reasonably available from other sources.  The ADR CAO may tentatively deny the request after determining that the communications are reasonably available elsewhere. 

**Communications****not reasonably available.**When the ADR CAO finds that DR communications are not reasonably available from other sources, within ten working days the ADR CAO should:

· Contact or meet with the party who made the oral or written communications,

· Discuss the scope and reason for the request;

· Make agency legal counsel available for advice to any affected person; and

· Contact or meet with the agency dispute resolution specialist, program administrator, and the neutral to find whether there are any objections to release.

**Release of dispute resolution communications.**  The ADR CAO may approve access when the neutral, all parties, and an affected non-participant agree to disclosure, or the ADR Act clearly authorizes disclosure.  Otherwise the CAO should inform the requester that he may make a direct request to the agency head (or an independent decider designated by the agency head) for a final decision within the agency. 

**Decision on neutral objection.**When a non-agency neutral or party objects to disclosure, the ADR CAO should inform the requester and clarify options available under the ADR Act.  When an internal agency neutral or party objects to release of a DR communication, the CAO should inform the requester that he may appeal to the agency head for a final decision within the agency.  The requester and the internal neutral or party should have an opportunity to make a detailed submission for consideration by the agency head, who should have five working days to decide whether to provide access to the DR communication.  The decision of the agency head is the final agency decision for internal agency neutrals and parties.  A private or otherwise independent neutral or party should not be bound by the agency head's decision, and may seek judicial review of the decision unless all parties and the neutral have agreed in writing prior to the dispute resolution proceeding to consent to the agency head's decision.

**Court orders or subpoenas.** An agency, party, neutral, or affected non-participant may seek judicial review in accordance with the standards and procedures in the ADR Act. 

**Appendix 4**

**Federal**

**ADR Confidentiality**

**Guidance Documents**

[Insert Documents]

� 65 Fed. Reg. 83,085 (Dec. 29, 2000).

� The need for confidentiality in the context of settlement negotiations has long been recognized by Rule 408 of the Federal Rules of Evidence, which precludes introduction into evidence of the parties’ positions in settlement negotiations.  Rule 408 is an acknowledgment that the parties must be able to speak candidly regarding settlement offers, without fear that those positions will later be used against them in the event the dispute is not settled.  Similarly, Rule 26(b)(3) of the Federal Rules of Civil Procedure protects material prepared by the parties or their representatives in anticipation of litigation.  This rule also acknowledges that parties to a dispute must have some confidentiality protection for their own thoughts and honest evaluations of their positions.

� See, e.g., Administrative Conference Recommendation 88-11, 54 Fed. Reg. 5212 (Feb. 2, 1989), and 1 CFR Sec. 305.88-11 (1992); Freedman and Prigoff, Confidentiality in Mediation:  The Need for Protection, 2 Ohio St. J. Dis. Res 37, 43-44 (1986); Harter, Neither Cop Nor Collection Agent:  Encouraging Administrative Settlements by Ensuring Mediator Confidentiality, 41 Admin. L. Rev. 315, 323-324 (1989); Kirtley, The Mediation Privilege’s Transformation from Theory to Implementation:  Designing a Mediation Privilege Standard to Protect Mediation Participants, the Process and the Public Interest, 1995 J. Dis Res. 1, 17.

� 65 Fed. Reg. 83,085.

� 5 U.S.C. §574.  

� As the Senate report for the original ADR Act stated, the act’s confidentiality “...protections are created to enable parties to ADR proceedings to be forthcoming and candid, without fear that frank statements may be used later against them.  Thus, documents produced during an ADR proceeding, such as proposals to resolve the dispute, are immune to discovery unless certain specific conditions are met.”  (S. Rept.  No.  101-1005, 101st Congress, 2d Sess., p. 11).

� For instance, Senators Grassley and Durbin wrote to USDA's Office of Inspector General (OIG) in 1995 concerned that allowing access to DR communications could create doubts and concerns that would extend far beyond any single mediation program.  They stated, “During last year’s debate over the re-authorization of the ADR Act, a great deal of consideration and effort was extended to strengthening the confidentiality provisions of the act.  We, therefore, question your authority under sec. 574 of the Act to request mediator neutrals to release the names and addresses of mediation participants and documentation of the mediation services provided to them, including the final disposition of their cases... Indeed, misguided precedents set under this particular program could undermine the entire administrative dispute resolution process.”  Letter to James R. Ebbitt, Assistant Inspector General for Audit, OIG/USDA, dated July 16, 1997, from Senators Charles Grassley and Richard Durbin.

� Congress recognized that parties would be less forthcoming if they knew disclosure to be a significant possibility, and that even one or two cases where expectations of confidentiality are undermined could precipitate a damaging loss of trust in the confidentiality of federal ADR processes as a whol�e.

� U. S. Department of Justice, Attorney General’s Manual on the Administrative Procedure Act 48 (1947).

� As Peter Shane has noted:

A core lesson of modern administrative law is that our government of laws is profoundly a government of discretion.  Many significant federal administrative decisions are not subject to any great procedural constraint as to their timing, origination, or format...  [T]he forces that constrain discretion are often informal and largely beyond the capacity or desire of courts to review...  One critical executive function where discretion infuses the execution of the laws is the conduct of government litigation.  Not only government decisions to bring suit, but also the host of government decisions entailed in responding to a suit, typically are left to the near-plenary discretion of the Attorney General and subordinate lawyers. 

Shane, Consent Decrees: Practical Problems and Legal Dilemmas, 1987 U. Chi. L.F. 241.

� Philip J. Harter, Neither Cop Nor Collection Agent: Encouraging Administrative Settlements by Ensuring Mediator Confidentiality, 1 Admin. L.J. 315, 316 (1989).

� The APA’s legislative history makes clear that "even when formal hearing and decision procedures are available to parties, the agencies and parties are authorized to undertake the informal settlement of cases ... before undertaking the more formal hearing  procedure...."  S.Doc. No. 248, 79th Cong., 2d Sess. 24 (1945).  Schering Corp. v. Heckler, 779 F.2d 683 (D.C. Cir. 1985), supports the view that an agency's decision to settle an enforcement action is nonreviewable.   Moreover, courts tend to leave up to the agency the "precise nature of [such] informal procedures" and how an agency chooses to structure its behavior when engaging in such procedures.  Action on Safety and Health v. FTC, 498 F.2d 757, 762-63 (D.C. Cir. 1974), for example, held that an agency's power to prescribe consent negotiation procedures is committed to agency's discretion and not subject to judicial review.   The same Circuit later was “convinced that the FCC's decision to conduct...settlement negotiations in private was fully consistent with the discretion it is granted under the APA.” NYS Dep’t of Law v. FCC, 984 F.2d 1289 (D.C. Cir. 1993).

� See e.g., Heckler v. Chaney, 470 U.S. 821 (1985) (finding the FDA’s decision not to undertake enforcement action against an alleged violation of the food and drug laws to be “committed to agency discretion” under §701(a)(2) of the APA; and Chemical Waste Management Inc., v. EPA, 873 F.2d 1477 (D.C. Cir. 1989) (deferring to agency’s interpretation of hearing provision in environmental statute as permitting an informal adjudication procedure).

� In "explicitly authoriz[ing] the use of well-tested DR techniques" to "eliminate ambiguity of agency authority under existing law," the ADR Act endorses earlier procedures furthering effective negotiation.

� Agency decisions to use, or not use, an ADR proceeding are committed to agency discretion and not subject to judicial review.  5 U.S.C. §581.

� For example, when enacted in 1990, the Act's prohibition against disclosure by the neutral–a linchpin of the statute–was a novel concept.  Also, the question whether a neutral should have any "ownership" in confidentiality decisions was a topic that policy makers had differed over for years.  Section 574 made clear that, if parties in agency disputes wish to amend the Act's presumptive rules as to neutrals, then the neutral must be informed at the start and be part of any agreement.

� The Supreme Court’s approach to agencies’ interpretation of their own statutes is that if a statute under which an agency operates is silent or ambiguous with respect to a specific issue—i.e., Congress has not spoken directly to the precise question by statute—the agency's interpretation typically will be upheld if its construction of the statute is permissible.  See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  In 1998, President Clinton established an Interagency Working Group to facilitate, encourage, and provide coordination for agency development of ADR programs.  While, as a technical matter, Chevron (strong) deference may not be available to any single agency’s interpretation of the ADR Act (because it is a government-wide statute), reviewing courts would likely accord considerable deference to IADRWG guidance, as well as provide the normal degree of deference to individual agency interpretations of law.  See Skidmore v. Swift & Co., 323 U.S. 134 (1944) (agency interpretations entitled to judicial respect when persuasive).

� Section 574(a).  The federal ADR Act is a flat prohibition against unauthorized disclosure.  The recent Uniform Mediation Act (put forth by the ABA and the National Conference of Commissioners on Uniform State Laws) that some states have begun to adopt, is, by contrast, a “privilege” that protects against disclosure primarily in legal proceedings.   Thus, while a neutral might be precluded from testifying in court under either statute, the UMA probably does not prevent that neutral from otherwise disclosing mediation communications.  On the other hand, the ADR Act’s exception allowing parties to disclose communications “provided to or available to all parties” is not reflected in the UMA.

� 42 U.S.C. §7414(c).  

� Such agreements are contracts in nature between the parties, rather than a statutory protection under the ADR Act, and parties and program managers should understand that to date courts have not definitively ruled that on their enforceability.  Non�signatories are not bound by these agreements and are free to disclose dispute resolution communications or to seek disclosure through FOIA, discovery, or other appropriate processes.  Parties in an alternative dispute resolution proceeding need to understand these rules so that they can protect their interests, while at the same time using the unique advantages of ADR to their mutual benefit.

� The term "alternative means of dispute resolution," a key one in the legislation, is defined in section 571(3) as including any procedure that involves a neutral and is used to resolve issues in controversy, including, but not limited to, conciliation, facilitation, mediation, fact-finding, minitrials, arbitration, and use of ombuds, or any combination thereof.  The original version of the Act enacted in 1990 also referred to "ADR" as any procedure "used in lieu of an adjudication" as defined in to Section 551(7) of title 5.   Section 551(7) defines "adjudication" to include "agency process for the formulation of an order," and an "order" under section 551(6) is the "final disposition. . . . of an agency in a matter other than rule making. . . ."  Thus, since "order" and "rule" encompass all final agency actions, “ADR” was intended to include any procedure an agency may use to resolve any issue in controversy in any federal program activity.

� For further information about confidentiality in government cases, see Jeffrey M. Senger, Federal Dispute Resolution: Using ADR with the United States Government 187-195 (Jossey-Bass 2004).

� Federal ADR Council, Confidentiality in Federal Alternative Dispute Resolution Programs, Questions & Answers on Confidentiality, states that parties may "accept" ADR neutrals in various ways:

In light of the broad variety of ADR services and types of disagreements encompassed by the ADR Act, this requirement must be considered on a case by case basis to provide flexibility in how individual parties "accept" a neutral.  If an agency clearly identifies an individual as an intake or convening neutral, an agency or private party who contacts the neutral for the purpose of seeking aid in resolving a disagreement indicates an acceptance of the neutral for that purpose.  Likewise, the voluntary participation of a party in an ADR process conducted by a neutral indicates an acceptance of the neutral.  

(Citing 5 U.S.C. §§571(3), (6), (8), and (9) & §573(a)).

� Several federal agencies (e.g., US  IECR, US Postal Service) operate programs or rosters using neutrals they deem capable of handling typical regulatory or management disputes.  Other agencies (e.g., US EPA) employ private sector entities that operate as administrative neutrals but that are technically devices for expedited acquisition of services.  Also, state-level dispute resolution programs operate rosters of mediators that may be used in environmental, policy, or other cases; for example, many state level farmer-lender and agricultural mediation programs are housed in state agencies or in public academic institutions and serve as administrative neutrals for USDA and other agricultural disputes.  

� While program administrators may occasionally mediate or otherwise serve as session neutrals, this chapter discusses their roles and responsibilities before and after the session itself.

� Experts have begun to focus on the ethical and practical duties of “dispute resolution providers,” i.e., program administrators.  One useful example of an effort to focus more broadly on these issues relating to ADR programs was the CPR-Georgetown Commission on Ethics, Principles for ADR Provider Organizations (2001).  The Commission found that “provider organizations” have responsibilities to provide fair, impartial, and quality ADR services.  Several core principles guided this effort.  The first is that it is timely and important to establish standards of responsible practice in this rapidly growing field to provide guidance to ADR provider organizations and to inform consumers, policy makers, and the public generally.  Second, the most effective architecture for maximizing the fairness, impartiality, and quality of dispute resolution services is the meaningful disclosure of key information.  Third, consumers of dispute resolution services are entitled to sufficient information about ADR provider organizations and their neutrals to make well-informed decisions about their dispute resolution options.  And finally, ADR provider organizations should foster and meet the expectations of consumers, policy makers, and the public generally for fair, impartial, and quality dispute resolution services and processes to ensure that best practices will be highlighted in the development of the field.  The CPR-Georgetown Commission recommended several possible approaches to addressing the numerous issues of quality, selection, administration, access, oversight, and design that converge when public and private entities provide ADR services.  It recognized that, as dispute resolution activity becomes increasingly institutionalized, the need will grow for those who administer ADR programs to ensure that their efforts are effective and their activities viewed as fair and appropriate.  The Commission recognized that provider organizations’ efforts should include some self-assessment.

� See Federal ADR Council, Confidentiality in Federal Alternative Dispute Resolution Programs, Questions & Answers on Confidentiality, Question and Answer 10, relying on 5 U.S.C. §571(6) and §574(a) and (b).

� Note the following policy guidance issued by Office of the Secretary, U.S. Department of Health and Human Services, on April 10, 2000:

OS employees do not have a right to, nor should they an expectation of, privacy while using OS IT resources at any time, including accessing the Internet and using e-mail...Any use of the OS IT resources is made with the understanding that such use is generally not secure, is not private, and is not anonymous.  System managers employ monitoring tools in order to maximize the utilization of their resources, which may include the detection of inappropriate use.

� Various of these activities will occur in different situations, and will not take place at all in certain disputes.  For example, an EEO complaint may proceed directly to mediation if the complainant requests it.  In this case the “assessment” is made by the complainant based on information provided by the EEO counselor.  In addition, some mediators opt not to do convening, based on their personal approach to mediation. 

� The Committee appreciates the valuable assistance of Richard Walters on this section, as well as the administrative tribunal portion of Chapter 6.

� The Federal Aviation Administration’s Acquisition Management System does not contemplate a contracting officer’s “final decision” as a prerequisite to the initiation of proceedings before the ODRA.   Moreover, pursuant to an express delegation from the FAA Administrator, the ODRA is authorized to engage in ADR “at the earliest possible stage, even before any formal protest or contract dispute is formally filed with the ODRA.” FAA Administrator Delegation of July 29, 1998 (� HYPERLINK "http://www.faa.gov/agc/odra/DELEG2.HTM" ��http://www.faa.gov/agc/odra/DELEG2.HTM�).  In this regard, the ODRA has been resolving an increasing number of “pre-dispute” matters by means of ADR. See � HYPERLINK "http://www.faa.gov/agc/odra/stats2.htm" ��http://www.faa.gov/agc/odra/stats2.htm�.  ODRA Procedural Regulations, 14 CFR Part 17, mandate consideration of ADR and, if ADR is to be used, the execution of ADR agreements shortly after an initial scheduling conference.  To facilitate the parties’ early consideration of ADR the ODRA Director designates an ODRA Dispute Resolution Officer (DRO) as an ADR Coordinator as soon as a matter is filed with the ODRA.  The DRO/ADR Coordinator–who functions as an “intake neutral”–initiates separate contact with each of the parties and outlines for them their ADR options in terms of available neutrals and ADR techniques.  Such contacts are kept confidential and, even if the parties do not elect to use the ODRA’s ADR Coordinator as their neutral, the ADR Coordinator does not participate in any subsequent adjudication under the ODRA Default Adjudicative Process, should the matter not be resolved fully by means of ADR.  In such cases, a separate DRO is appointed to conduct the adjudication.  Similarly, in “pre-dispute” matters before the ODRA, should ADR not prove fully successful, the ODRA DRO who serves as the “pre-dispute” neutral does not participate in any subsequent ODRA adjudication and will maintain the confidentiality of the “pre-dispute” ADR proceedings.

� See FAR 33.214(b).  The CDA, as amended by the ADR Act, requires that a party rejecting a request for ADR provide the other party with the specific reasons for rejecting the request. In the case of a Government contracting officer, the CDA (see 41 U.S.C. §605(e)) requires that the explanation cite, if applicable, the conditions identified by the ADR Act that militate against the use of ADR procedures (see 5 U.S.C. §572(b)).  In the case of a contractor declining ADR, the requirement for explanation is imposed by the standard “Disputes” clause of the contract (see FAR 33.214(b) and FAR 52.233-1, para. (g)).

� See Section 224 of Public Law 108-176 (� HYPERLINK "http://www.faa.gov/agc/odra/Section%20224,%20Excerpt.htm" ��http://www.faa.gov/agc/odra/Section%20224,%20Excerpt.htm�).

� According to the Federal ADR Council confidentiality guidance,

The ADR Act provides that a neutral should be acceptable to the parties.  In light of the broad variety of ADR services and types of disagreements encompassed by the ADR Act, this requirement must be considered on a case by case basis to provide flexibility in how individual parties ‘accept’ a neutral.  If an agency clearly identifies an individual as an intake or convening neutral, an agency or private party who contacts the neutral for the purpose of seeking aid in resolving a disagreement indicates an acceptance of the neutral for that purpose.  Likewise, the voluntary participation of a party in an ADR process conducted by a neutral indicates an acceptance of the neutral.

Federal ADR Council, Confidentiality in Federal Alternative Dispute Resolution Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000) (Who is a Neutral?).

� §571(7)(B).

� This is the Act’s “default” approach; in keeping with ADR processes’ goal of empowering participants to employ flexible means of resolution, the Act also allows parties and a neutral to agree in advance to different standards of neutral confidentiality in a particular case.  The ADR Act contains several other provisions regarding neutrals.  Section 573(a) provides that a neutral must be acceptable to the parties and states, "A neutral shall have no official, financial, or personal conflict of interest with respect to the issues in controversy, unless such interest is fully disclosed in writing to all parties and all parties agree that the neutral may serve."  In addition, in 1996 Congress revised the ADR Act and agency acquisition laws to exempt acquisition of all ADR neutrals' services (in any part of an alternative dispute resolution or negotiated rulemaking process) from government contracting rules that normally require open competition.  Many agencies now use less than full and open competition to acquire the services of session, administrative, and convening neutrals in proceedings under the ADR Act.  See 5 U.S.C. §569(c) (amending federal procurement statutes, including 41 U.S.C. §253(c)(3)(C) for civilian agencies and 10 U.S.C. §2304(c)(3)(C) for defense agencies).

� These Standards, adopted in 1994 by the American Arbitration Association, the Section of Dispute Resolution of the American Bar Association, and the Society of Professionals in Dispute Resolution (now the Association for Conflict Resolution), address the mediator's duties as regards issues like party self-determination, neutrality, bias, and confidentiality.  Those three groups have begun a process to revise these standards.  See � HYPERLINK "http://moritzlaw.osu.edu/dr/msoc/pdf/sep_draft.pdf" ��http://moritzlaw.osu.edu/dr/msoc/pdf/sep_draft.pdf�.  See also, e.g., CPR-Georgetown Commission on Ethics and Standards in ADR, Model Rule for the Lawyer as Third-Party Neutral (November 2002); JAMS Mediator Ethics Guidelines (2003) (http://www.jamsadr.com/mediation/ethics.asp).

� See this Chapter’s discussion of "Dealing with Potential Exceptions to the Disclosure Prohibition," and of handling access requests in Chapter 9.

� For instance, while these laws’ applicability and effect are uncertain, some have raised questions as to the potential impact on agency neutrals of statutes that afford access to records by other agencies or functions within an agency, such as the Inspector General Act (5 U.S.C. App.) and the Whistleblower Protection Act (5 U.S.C. §1212(b)(2)). See generally, Federal ADR Council, Confidentiality in Federal Alternative Dispute Resolution Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000).

� A neutral’s disclosure of private recollections or documents that ignores the wishes and interests of the participants could be misconstrued as showing a bias against some party or interest, seriously disadvantage a party, and even inhibit future participation in ADR generally.  See Chapter 2.

� As Chapter 2 discusses, the ADR Act permits parties and neutrals to agree in advance to different confidentiality standards, subject to certain limits intended to assure open government.

� Some argue that neutrals should downplay confidentiality—that overemphasis can do more harm than good, especially given the fact that confidentiality issues do not often arise in federal ADR practice.  However, intake personnel and neutrals who understand the scope of confidentiality and are effective in conveying that understanding help parties make reasonable, informed judgments about what they can and cannot expect to be treated as confidential.  To de-emphasize confidentiality could suppress expectations as to confidentiality and the utility of ADR.

� A few have suggested that a court might create additional exceptions beyond those specified by Congress.   In an analogous state context, the leading relevant decision is a recent opinion from the Supreme Court of California, Foxgate Homeowners' Ass'n, Inc. v. Bramalea California, Inc., 25 P.3d 1117, 26 Cal.4th 1 (2001).  It offers some instructive reasoning and strong support for the primacy of an explicit statutory structure protecting mediation confidentiality.  The court found the language of Evidence Code sections establishing confidentiality protections in litigation to be clear and unambiguous, and declined to recognize any judicially crafted exception to the confidentiality mandate of those provisions.  In reaching its decision, the court found,

“[t]he legislative intent underlying the mediation confidentiality provisions of the Evidence Code is clear. . .  [T]he purpose of confidentiality is to promote a candid and confidential exchange, which can only be achieved, if the participants know that what is said in mediation will not be used to their detriment through later court proceedings and other adjudicatory processes... Confidentiality is essential to effective mediation, a form of alternative dispute resolution encouraged and, in some cases required by, the Legislature and [t]o carry out the purpose of encouraging mediation by ensuring confidentiality, the statutory scheme... unqualifiedly bars disclosure of communications made during mediation absent an express statutory exception.” (26 Cal.4th 1, 13).

� Agreements to mediate and settlement agreements reached as a result of a dispute resolution proceeding are specifically excluded from the definition of DR communications.

� Occasionally, agencies have employed this exception to require all parties and the neutral, as a prerequisite for use of mediation, to agree in writing that the neutral may, or even must, investigate or report certain kinds of allegations or disclose a dispute resolution communication to nonparties for various reasons (e.g., to prevent or investigate fraud, waste, abuse; deter criminal activity; or enable investigators’ ease of access).  While agencies may possess legal authority under the ADR Act to routinely require such agreements, many observers view such systematic diminution of neutrals’ confidentiality as imposing impractical burdens on neutrals and potentially diminishing parties’ confidentiality expectations so much as to reduce the benefits of ADR intended by Congress in enacting the ADR Act.  

� Even then, disclosure as a neutral is a last resort: “but a neutral should make such communication public only if no other person is reasonably available to disclose the communication.”

� The potential impact of the confidentiality mandate in the Standards of Conduct for Mediators, above, and of their broader exception involving disclosure "required by law or other public policy," is not certain.  Regarding the ethical issue, the strongest argument is simply that the ADR Act as a federal statute supersedes, or gives specific meaning to, a generalized policy or standard of conduct.  In a few cases, contravening ethical canons or other statutes may need to be harmonized.

�  The Committee takes no position as to whether “statutes” includes state statutes mandating disclosure, as well as federal ones.

� This section clearly applies, for example, to the Clean Air Act, which states that certain records, reports or information obtained from regulated entities “shall be made available to the public.”  42 U.S.C. §7414(c).

� See Chapter 9, below, for a more detailed discussion of these authorities.  Under the Inspector General Act of 1978, for instance, agency employees are expected to cooperate with data requests from their agency’s OIG.

� Section 574(e).

� Senger, supra note 21 at 179 (citing a racketeering trial concerning a “mediation” among criminal defendants conducted by another reportedly criminal group); see also, “Jersey boys” mediate a Dixie mob dispute, Newark Star Ledger, July 22, 1987; State v. Castellano, 460 So. 2d 480, 481-2 (Fla. App. 1984); Nancy Rogers & Craig McEwen, Mediation: Law, Policy, Practice 6, 24 (2d ed., 1994).

� A few observers have expressed concern that this process could cause mischief by affording miscreants advance knowledge of sensitive investigations, especially if there were collusion between a neutral and parties fraudulently manipulating the ADR process.  In those rare cases where this might become an issue, however, this concern could be handled by having the court consider data needs on an in camera basis, at least preliminarily.

� See Chapter 9 for suggestions on responding to requests for confidential information.

� “Dispute resolution communication” means any oral or written communication prepared for the purposes of a disputes resolution proceeding, including any memoranda, notes or work product of the neutral, parties or non-party participant; except that a written agreement to enter into a dispute resolution proceeding, or final written agreement or arbitral award reached as a result of a dispute resolution proceeding, is not a dispute resolution communication.   5 U.S.C. §571(5).

� “A party to a dispute resolution proceeding shall not voluntarily or through discovery or compulsory process be required to disclose any dispute resolution communication,...”  5 U.S.C. §574(b).

� See Chapter 2, The Legal Framework for Federal ADR, Exceptions to Confidentiality.

� A party shall not disclose dispute resolution communications, "except for dispute resolution communications generated by the neutral, the dispute resolution communication was provided to or was available to all parties to the dispute resolution proceeding."  5 U.S.C. §574(b)(7).	

� See Chapter 2’s sections on ADR and administrative law and the legal framework for federal ADR for a description of agencies’ extraordinarily broad discretion as to bringing litigation or other proceedings, settling cases, structuring settlement processes, and making a host of other decisions in implementing opportunities to settlement. See also Federal ADR Council, Confidentiality in Federal Alternative Dispute Resolution Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000); and Senger, supra note 21 at 195-196, 199 (noting that parties may use contracts to increase confidentiality of joint sessions, encouraging them, and citing favorably the Federal ADR Council guidance). 

� See Chapter 2, ADR and administrative law, as well as that Chapter’s discussion of the Act’s legislative history.

� H.R. Rep. No. 104-597, at 5 (1996); see also H.R. Conf. Rep. No. 104-841, at 8 (1996).  In 1996, when the sunset provisions of the 1990 Act brought it up for renewal, (b)(7) was considered for elimination in conjunction with the creation of a special ADR exemption to the FOIA.  In resolving the differences between the Senate and the House, the conference committee managers said:

The Managers recognized that the intent of the Conference Agreement not to exempt from disclosure under FOIA a dispute resolution communication given by one party to another party could be easily thwarted if a neutral in receipt of a dispute resolution communication agrees with a party to in turn pass the communication on to another party.  It is the intent of the Managers that if the neutral attempts to circumvent the prohibitions of the ADR Act in this manner, then exemption from FOIA would not apply.

� S. Rep. No. 104-245, at 4 (1996).  

� This Guide does not address the role of federal employee labor union representatives in an agency mediation process.   While not directly addressing the role played by federal employee labor unions in an agency's mediation program, the Committee believes that agency ADR program managers and union leadership can benefit greatly by discussing mutual expectations and roles.  Several agencies have worked closely with unions to craft programs that meet their needs and serve the interests of employees. 

� Shuttle diplomats, however, need to be wary not to use this technique as a “sham” to avoid 574(b)(7).  See H.R. Conf. Rep. No. 104-841, at 8 (1996).  

� Intake and case assessment are described generally in Chapter 3.

� 5 U.S.C. §§571(6) and (8); Federal ADR Council, Council, Confidentiality in Federal Alternative Dispute Resolution Programs, supra note 1.

� 5 U.S.C. §574(b)(7).

� Note that while parties may agree among themselves not to disclose communications available to all parties, non�signatories may still be free to disclose or to seek disclosure of some communications through discovery or FOIA requests documents.  See Chapter 5.

� 5 U.S.C. §571(7).

� 5 U.S.C. App 2; 5 U.S.C. §§561-570.

� For instance, see Chapter 2’s discussion of “Why Confidentiality Matters In ADR,” which states:

ADR techniques, including mediation, typically employ an impartial third party to aid the disputing parties reach agreement. An ADR neutral (such as a mediator) typically promotes a candid exchange regarding prior events and the parties’ perception and attitudes, and encourages parties to think creatively about ways to resolve their differences. The impartial third party (or “neutral) can improve the negotiations and enhance the possibility of agreement by holding both joint sessions among the parties and separate, confidential meetings with each party (caucuses”) where they are able to discuss candidly their positions and consider alternatives. The neutral, without disclosing any confidences, can then use the confidential information to shape the negotiations to reach settlement more effectively.

� Numerous articles state unequivocally that some ombuds activities fall under the cluster of processes known as "ADR."  See, e.g., Shirley Wiegand, A Just and Lasting Peace: Supplanting Mediation with the Ombuds Model, 12 Ohio St. J. of Dis. Res. 95 (1996); Note, Corporate Ombudsmen and Privileged Communication: Should Employee Communications to Corporate Ombudsmen Be Entitled to Privilege?, 61 Cin. L. Rev. 653, 667 (1992); David R. Anderson and Diane M. Stockton, Federal Ombudsmen: An Underused Resource, 5 Admin. L.J. Am. U. 275, 289-98 (1991).  

� A major feature of an ombud's work is providing upward feedback, i.e., reporting and making recommendations for the improvement of the general administration of the entities they serve.  On the basis of their work on individual cases, ombuds can become aware of patterns or multiple conflicts within an entity and make reports that facilitate an entity's future ability to prevent complaints. 

� One analysis of the ADR Act’s applicability to the activities of ombuds–a law review piece by Harold Krent–tends toward a negative conclusion regarding the Act’s coverage.  Harold J. Krent, Federal Agency Ombuds: The Costs, Benefits, and Countenance of Confidentiality, 52 Ad. L. Rev. 18 (2000).  Professor Krent correctly states that the ADR Act's "criteria do not clearly apply to many of the activities of an ombuds."  However, while he raises some interesting questions (and the issue may be close), his conclusion that most ombuds casework is not covered is unpersuasive.  

.  

� 5 U.S.C. §571(3).

� Krent, Federal Agency Ombuds, supra.

� A neutral's appointment does not require a written agreement or a specified party selection process.  Many ADR neutrals are "appointed" by program administrators, agencies, chief judges, or others.  This is an acceptable mechanism for satisfying the Act’s requirement that the neutral be accepted by the parties, according to the Federal ADR Council confidentiality guidance.  Confidentiality in Federal Alternative Dispute Resolution Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000).  Professor Krent points out that since those who avail themselves of an ombuds' services lack the discretion to choose a different neutral, an ombuds is not a neutral for purposes of the Act.  The fact, though, is that one party (the agency) has committed in advance to accept the ombuds as a neutral while the other (the complainant) need not pursue the ombuds process if s/he deems that process unacceptable.

� The Ombudsman Association, Code of Ethics and Standards of Practice (2004).

� American Bar Association, Standards for the Establishment and Operation of Ombuds Offices (2004).

� See generally, An Ounce of Prevention: Best Practices in Dispute Avoidance for Government Contracting (ABA Public Contract Law Section Task Force on Dispute Avoidance and Early Dispute Resolution, 2002).  

� There are separate legal obligations not to disclose agency records to any person, private entity, and other government agencies when the agency record is within the scope of the Privacy Act, 5 U.S.C. §552a.  The Privacy Act bars disclosure of agency records within a system of records, which are retrievable by the name of individual or some other kind of identifier, unless the individual consents.  Agency records under the Privacy Act are defined as any kind of information maintained by an agency about an individual.  Other ADR-related documents may be subject to the Privacy Act’s restrictions on disclosure when the documents: (i) are agency records for purposes of the Federal Records Act and hence retained for a period of time by the agency and (ii) must be maintained within a system of records retrievable by an identifier or the individual’s name.  If an agency has federal employees serving as neutrals or a separate dispute resolution office, then these neutrals or offices must consider whether the Privacy Act applies to its records under the foregoing tests and set up safeguards to prevent disclosure of these records without the individual’s consent.

� 5 U.S.C. §574(h).

� 5 U.S.C. §552.

� See generally 5 U.S.C. §552.

� See 5 U.S.C. §574(j). 

� That is the position taken by the Federal ADR Council in its Confidentiality in Federal Alternative Dispute Resolution Programs.  In Question and Answer 10, the Council says that the Act’s confidentiality protections do not apply to communications made after resolution efforts aided by the neutral have ended.  Under this reading, communications for the purposes of evaluation of a process would seem not to be exempt from FOIA.

� Exempt records include matters that are: (1) specifically kept secret  under an executive order in the interest of national defense or foreign policy; (2) related solely to the internal personnel rules and practices of an agency; (3) specifically exempted from disclosure by statute; (4) trade secrets and commercial or financial information obtained from a person and privileged or confidential; (5) inter-agency or intra-agency memorandums or letters not available by law to a party other than an agency in litigation with the agency; (6) personnel, medical, and similar files the disclosure of which would invade personal privacy; (7) records or information compiled for law enforcement purposes; (8) for the use of an agency in regulating or supervising financial institutions; or (9) geological and geophysical information.

� As discussed in Chapter 4, exceptions to its general prohibition against disclosure by a neutral are:

All parties to the dispute resolution proceeding and the neutral consent in writing, and, if the dispute resolution communication was provided by a non-party participant, that participant also consents in writing,

Communications that have already been made public,

Information that is required by statute to be made public, where no other person is reasonably available to disclose it, or

Information a court may order disclosed, after proper consideration, in order to prevent a manifest injustice, help establish a violation of law, or prevent harm to the public health or safety.

� Some agency ADR programs make reference to regulations issued by the Office of Government Ethics regarding responsibilities of a federal employee when he/she learns of “fraud, waste, and abuse.”  In light of the provisions of the ADR Act, most federal ADR programs, including the Sharing Neutrals Program administered in the Department of Health and Human Services, http://www.cms.hhs.gov/about/oeocr/SNMediationStandardsPolicies.pdf , do not require federal agency neutrals to report such information on the principles that (1) negotiations in ADR benefit from clear expectations of confidentiality and (2) reducing or blurring those expectations will discourage potential users of ADR processes, diminish communication when ADR is used, and place onerous burdens on agency neutrals (who could be required to make legal or policy decisions in a short time with little authoritative advice).  The Sharing Neutrals Program’s code of ethics, for example, does not provide that its federal employee mediators have any obligation to report instances of fraud, waste or abuse when doing so would contravene the ADR Act’s confidentiality section.  Some agencies take a different approach: for example, the Department of the Navy, using the authority of 574(a)(1), requires that all parties and the neutral, as a prerequisite to use of mediation to resolve workplace disputes, sign a mediation agreement that states, "The parties and participants authorize the mediator to disclose to other parties or to nonparties any dispute resolution communication that, in the judgment of the mediator, must be disclosed to prevent or investigate fraud, waste, abuse, criminal activity or imminent physical harm."  Whatever the relevance of federal regulations to federal employee neutrals, private sector neutrals are not bound to report such information or behavior unless the neutral explicitly agrees otherwise in writing, is ordered by a judge under 5 U.S.C. §574(a)(4),  is required by statute to make a communication public, or is called on disclose by clearly applicable professional standards.  

� These may include, 18 U.S.C. §4 (knowledge relating to the commission of a felony) and 28 U.S.C. §535 (investigation of crimes involving government officers and employees).

� e.g., Inspector General Act of 1978, as amended, 5 U.S.C. app. 3, §6(a)(2); the Whistleblower Protection Act (5 U.S.C. §1212(b)(2)); USA PATRIOT Act, P.L. 107-56, 115 Stat. 272 (2001) (esp. 18 U.S.C. 2701-2709) (Chapter 121).

� Under the Inspector General Act of 1978, agency employees are expected to cooperate with data requests from their agency’s OIG; thus, no subpoena power was created for those cases, in contrast to OIG data requests from other entities.  To date, the Confidentiality Committee is aware of no situation that has squarely raised this issue, and no court has explicitly addressed how to strike a balance in the rare case where the important goal of furthering government accountability may diverge from that of promoting flexible, efficient decision-making via confidentiality.  

� For an extreme example, note a proposed rule for the Agricultural Mediation Program published by USDA in 1999 (later modified substantially in light of comments received) that would have required that all agreements to mediate state,

Notwithstanding the confidentiality of mediation sessions, mediators will notify all participants in writing at the beginning of the mediation session that the Agency, the Comptroller General of the United States, the Agricultural Mediation Program Administrator, or any of their representatives will have access to mediation records to conduct an audit or evaluation of mediation services funded in whole or in part by the Agency.

� Breakey v. Inspector General of the United States Department of Agriculture, 836 F. Supp. 422 (E.D. Mich. 1993).

� 12 U.S.C. §§3401-3422 (1989 and Supp. 1993).

� Confidentiality supporters note that the ADR Act’s language, its legislative history, and various statements of its sponsors express a strong policy in favor of protecting DR communications.  See Chapter 2.

� Some investigators have suggested that in some circumstances public policy may require that a neutral refrain from notifying parties and others of a request for information, such as where the neutral is advised that such notification would interfere with an ongoing investigation.  Conceivably disclosure under the ADR Act could cause mischief by affording miscreants advance knowledge of sensitive investigations, especially if there were collusion between a mediator and parties fraudulently manipulating the process.  In those exceedingly rare cases where this might become an issue, the Committee believes that this concern could be handled by having the court consider data needs on an in camera basis, at least preliminarily.

� Such procedures could balance: (1) the need of authorized investigators to prevent manifest injustice, establish a violation of criminal law or similar government misconduct, or prevent harm to the public health and safety against (2) the need to protect the integrity of the agency's present and future dispute resolution proceedings, the facilitation of frank discussions of issues, and the timely resolution of problems.

� They may wish to offer private neutrals the option of employing them voluntarily in lieu of the procedures set forth in the ADR Act.

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