A former employee [Plaintiff] of International Business Machines Corporation ([IBM] had signed a separation agreement requiring confidential arbitration of any claims arising from her termination.* Plaintiff arbitrated an age-discrimination claim against IBM and won. Plaintiff then filed a petition in federal district court under the Federal Arbitration Act [FAA] to confirm the award, attaching it to the petition under seal but simultaneously moving to unseal it.
Shortly after Plaintiff filed the petition, IBM paid the arbitration award in full. The federal district court granted Plaintiff’s petition to confirm the award and her motion to unseal the arbitration award.
IBM appealed the district court's unsealing of the award, contending that (1) the petition to confirm became moot once IBM paid the award, and (2) the district court erred in unsealing the confidential award.
The United States Court of Appeals, Second Circuit, agreeing with IBM, explaining that Plaintiff's petition to confirm her purely monetary award became moot when IBM paid the award in full because there remained no “concrete” interest in enforcement of the award to maintain a case or controversy.
The Circuit Court also ruled that any presumption of public access to judicial documents was outweighed by the importance of confidentiality under the FAA and the impropriety of Plaintiff’s effort to evade the confidentiality provision in her arbitration agreement. In the words of the court, "In short, the presumption of access to judicial documents is outweighed here by the interest in confidentiality and because [Plaintiff's] apparent purpose in filing the materials publicly is to launder their confidentiality through litigation."
Concluding that the district court should not have granted Plaintiff’s motion to unseal the award," the Circuit Court of Appeals remanded the matter to the federal district court "with instructions to dismiss the petition as moot" and reversed the district court's ruling unsealing the award.
* Plaintiff had signed the separation agreement in exchange for "severance payments and other benefits. The Agreement included a class- and collective-action waiver requiring claims arising from her termination—including claims under the ADEA—to be resolved “by private, confidential, final and binding arbitration.”
Click HERE to access the Circuit Court of Appeals' decision posted on the Internet.