Opinion ID: 1315738
Heading Depth: 2
Heading Rank: 2

Heading: Enforceability of the Confidentiality, Brief Summary, and Discovery Provisions

Text: Guyden also objects to three particular aspects of this particular arbitration arrangement. First, she claims that the Agreement's confidentiality clause will prevent other employees from learning about her allegations against Aetna and thereby undermine one of the purposes of the SOX whistleblower protection provision. Second, she attacks the requirement that the arbitrator provide a brief summary of his or her decision, arguing that the brevity of the summary will prevent effective review of the arbitrator's decision. Third, she argues that the Agreement does not provide for sufficient discovery.
The Agreement includes the following confidentiality clause: All proceedings, including the arbitration hearing and decision, are private and confidential, unless otherwise required by law. Arbitration decisions may not be published or publicized without the consent of both the Grantee and the Company. Guyden argues that this clause conflicts with one of the purposes of the SOX whistleblower provisionto communicate to other employees that their rights will be protected if they report wrongdoing. She believes that if she prevails on her claim, other employees should be able to learn of her success and thereby be reminded of their rights under SOX. We find some support for Guyden's contention that in the context of individual statutory claims, a lack of public disclosure may systematically favor companies over individuals. Cole v. Burns Int'l Sec. Servs., 105 F.3d 1465, 1477 (D.C.Cir.1997). Arbitration of SOX whistleblower claims, like arbitration of any other statutory claims, can be expected to be more private than litigation, and the private nature of the dispute resolution process might reduce whatever incentive the fact of publicity instills in potential whistleblowers. [2] We agree, however, with the Fifth Circuit's observation that confidentiality clauses are so common in the arbitration context that Guyden's attack on the confidentiality provision is, in part, an attack on the character of arbitration itself. Iberia Credit Bureau, Inc. v. Cingular Wireless LLC, 379 F.3d 159, 175 (5th Cir.2004). The Supreme Court has warned against [s]uch generalized attacks on arbitration, because they rest on suspicion of arbitration as a method of weakening the protections afforded in the substantive law to would-be complainants and consequently are far out of step with our current strong endorsement of the federal statutes favoring this method of resolving disputes. Gilmer, 500 U.S. at 30, 111 S.Ct. 1647 (internal quotation marks and alterations omitted). Because confidentiality is a paradigmatic aspect of arbitration, our determination that SOX whistleblower claims are arbitrable precludes Guyden's challenge to the privacy of the resulting arbitration.
The Agreement states that [u]nless otherwise agreed, the arbitrator's decision will be in writing with a brief summary of the arbitrator's opinion. Guyden argues that this provision will prevent her from obtaining effective judicial review of the arbitrator's decision, as the brevity of the required summary will allow the arbitrator knowingly to ignore the law because no one would be the wiser. [3] The Supreme Court addressed a similar claim in Gilmer, where the plaintiff challenged arbitration of an Age Discrimination in Employment Act (ADEA) claim because arbitrators often will not issue written opinions, a failure that the plaintiff alleged would result in a lack of public knowledge of employers' discriminatory policies, an inability to obtain effective appellate review, and a stifling of the law's development. Gilmer, 500 U.S. at 31, 111 S.Ct. 1647. The Court observed that the relevant arbitration rules required that all arbitration awards be in writing, and that the awards contain the names of the parties, a summary of the issues in controversy, and a description of the award issued. Id. at 31-32, 111 S.Ct. 1647. Though the Court acknowledged that judicial review of the arbitrator's decision would be limited, it found that review sufficient to ensure that arbitrators comply with the requirements of the statute. . . . Id. at 32 n. 4, 111 S.Ct. 1647 (internal quotation marks omitted). Guyden's challenge fails for similar reasons. The arbitration agreement in Gilmer required no more than is required by the instant Agreement. Guyden's attack on the brief summary requirement assumes that the arbitrator will knowingly refuse or fail to apply controlling law and then insulate that failure from review through the form of its written decision. She has provided us with no basis for that speculation, and we cannot rely on her fears to find the Agreement unenforceable on this basis. See Mitsubishi Motors Corp., 473 U.S. at 634, 105 S.Ct. 3346 (refusing to indulge the presumption that the parties and arbitral body conducting a proceeding will be unable or unwilling to retain competent, conscientious, and impartial arbitrators); cf. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 90-91, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) (refusing to invalidate an arbitration agreement based on speculation that the claimant might not be able to vindicate her statutory rights).
The arbitration agreement at issue allows for limited discovery: The Grantee and the Company shall be entitled to conduct limited pre-hearing discovery. Each may take the deposition of one person and anyone designated by the other as an expert witness. . . . Additional discovery may be permitted by the arbitrator upon a showing that it is necessary for that party to have a fair opportunity to present a claim or defense. Guyden argues that the discovery permitted by the Agreement is inadequate to allow her to present her claim. According to Guyden, she needs access to third-party discovery, subpoenas, and document production. In response to Aetna's argument that Guyden can apply to the arbitrator for [a]dditional discovery, Guyden points out that she has limited resources, and therefore will be unable to make the required showing. Guyden's challenge is to some extent an attack on the character of arbitration itself, Iberia Credit Bureau, Inc., 379 F.3d at 175, and courts generally treat arguments relating to discovery provisions as procedural in nature, and therefore left for an arbitrator to resolve, Kristian v. Comcast Corp., 446 F.3d 25, 43 (1st Cir. 2006); see also CIGNA HealthCare of St. Louis, Inc. v. Kaiser, 294 F.3d 849, 855 (7th Cir.2002). The discovery provision here nevertheless raises serious questions about whether Guyden effectively may vindicate [her] statutory cause of action in the arbitral forum, Mitsubishi Motors Corp., 473 U.S. at 637, 105 S.Ct. 3346. We agree with the district court that limited discovery comprising one deposition of a fact witness is unlikely to be adequate to advancement of [Guyden's] whistleblowing claim. Guyden I, 2006 WL 2772695, at , 2006 U.S. Dist. LEXIS 73353, at . If the discovery limitations were strictly enforced, the Agreement might well be unenforceable because it would not, under those circumstances, allow Guyden a meaningful opportunity to present her claim. We need not determine what our decision would be under those circumstances, however, because this Agreement gives the arbitrator the power to order additional discovery upon a showing by Guyden that such discovery is necessary to enable her to present her claim. The FAA also provides the arbitrator with further authority to compel the production of evidence and witnesses at a pre-merits hearing. Stolt-Nielsen SA v. Celanese AG, 430 F.3d 567, 578-80 (2d Cir.2005). Guyden thus has both a contractual and a statutory basis for further discovery should it prove necessary for her claim. Although Guyden asserts that she will be unable to make the showing of necessity the arbitrator will require, her challenge assumes that, in violation of her contractual and statutory rights, an arbitrator will deny her needed discovery. Guyden has introduced no evidence that her fears are well-founded, however, and we must enforce the Agreement unless and until the record proves otherwise. See Green Tree, 531 U.S. at 90-91, 121 S.Ct. 513 (enforcing arbitration agreement despite the risk of unbearable arbitration costs because the record contain[ed] hardly any information on the matter and the risk was therefore too speculative to justify the invalidation of an arbitration agreement).