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A presumption of public access to judicial documents may be outweighed by the importance of maintaining confidentiality under the Federal Arbitration Act

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.

 

Former town court clerk pleads guilty to Jobbery

As noted in previous NYPPL reports of misconduct involving a public employee stealing public funds, such breaches of the public trust are frequently referred to as "jobbery." Merriam-Webster defines jobbery as "the improper use of public office or conduct of public business for private gain".

On August 17, 2023, State Comptroller Thomas P. DiNapoli, Wayne County District Attorney Michael Calarco and the New York State Police announced that the former court clerk for the Town of Marion, Eileen Steurrys, pleaded guilty to stealing over $50,000 from the town court.

“Ms. Steurrys went to great lengths to try and cover up her theft of public funds. She now faces the consequences of her actions because of my office’s investigation and our partnership with District Attorney Calarco and the State Police,” New York State Comptroller DiNapoli said. “My thanks to the District Attorney and the State Police for their continuing partnership in combating public corruption.”

Following the plea, Prosecutor John J. Ferlicca of the Wayne County DA’s Office said, “The auditors from the State Comptroller did an exceptional and thorough investigation, which made my job of obtaining a conviction that much easier.”

New York State Police Acting Superintendent Steven A. Nigrelli said, “This guilty plea today once again demonstrates the hard work of law enforcement partners focused on the same goal: holding those who break our laws, accountable. Ms. Steurrys manipulated a position she was entrusted in and used it to her own advantage. We will not tolerate such corruption from those who use their position to profit at the expense of the local community. I commend and thank the State Comptroller’s office and the Wayne County District Attorney’s office for their commitment to investigating and prosecuting those who prey on their community.”

Steurrys’ crimes were uncovered during DiNapoli’s audit of the Town of Marion Court Fund, which found that court fees collected were not always being deposited into the court’s account. A resulting investigation, in collaboration with Wayne County District Attorney Calarco and the State Police, determined that, from 2016 to 2021, Steurrys stole over $50,000 and altered court records and created phony receipts to conceal her crimes. She was arrested in March following the joint investigation.

Steurrys’ pleaded guilty to Grand Larceny in the Second Degree, Corrupting the Government in the Second Degree, Tampering with Records in the First Degree and Official Misconduct before Wayne County Court Judge Richard M. Healy. Her sentencing is scheduled for October 18, 2023