Arbitration (Awards) Not Necessarily Private in Texas

Thanks to Professor Ross Runkel for calling my attention to a case decided in my own backyard, McAfee, Inc. v. Weiss, (Tx. App. - Dallas 3.16.11), which held that a trial court's refusal to seal an arbitration opinion and award  attached to a motion to confirm the award was not an abuse of discretion.

If you are not aware of the several excellent publications Ross has, you should be. This one was in his Arbitration Law Memo March 2011.

The case turned on an application of Rule 76a of the TRCP which deals with the sealing of records. Since one of the benefits of arbitration is privacy, this is an interesting twist.

The case was only decided a couple of weeks ago, so it is possible that this is not the last word as the full Dallas Court of Appeals might be asked to reconsider, or even the Texas Supreme Court.

Since the Texas Rules of Civil Procedure, including the sealing of documents, are promulgated by the Supreme Court and that Court, through its decisions has been a strong proponent for arbitration , it poses an interesting policy issue for them.

It could be addressed through a case like this one, or addressed through the rule making process. However, it is addressed it does seem worthy of serious focused review between two worthy goals, alternative dispute resolution and the open court proceedings.

With a Friend Like Justice Scalia ... Cat's Paw Decision Not Very Employer Friendly

Although viewed as one of THE most conservative justices, I am not sure anyone who is very knowledgeable about employment law relishes the idea of Judge Scalia writing the majority opinion in an employment law case. If they did before this term, their view would be strongly challenged by today's decision in Staub v. Proctor (S.Ct. 3.1.11) [pdf] and coupled with his earlier opinion in Thompson v. North American Stainless, should readily disabuse them of that notion.

Nothing is rarely as bad as it appears on first blush, and perhaps a closer reading will lessen my angst over today's opinion. But at least I am not the only one feeling the same way. Jon Hyman at Ohio Employer's Law Blog, calls it a "huge victory" for employees.

One immediate concern is that the Court takes what is a relatively narrow range of cases, where a decision maker is deemed to have been "used" by another to carry out his or her discriminatory intent, and by focusing on the underlying disciplinary actions and the motives of those who carried them out,  seems to invite numerous fights over each and every warning or other disciplinary activity that were given to an employee in the past and that might could arguably have been a factor in the termination decision. It is almost certain that there will be many more "Staub cat's paw cases" after today's decision than we have dealt with before.

Proponents will argue that this is not so, that it is only those that rise to the high level of proximate cause that are at issue. But those who do, probably do not deal with day to day employment litigation where every opportunity to raise a fact issue is yet another arrow in the plaintiff's quiver. Today, I am afraid, at least until courts below fill in the gaps, the Court has created more complexity and less certainty.

And in a time when there is confusion enough over what is the standard for determining the basic question "what is discrimination," the addition of the negligence tort doctrine of proximate cause into the mix seems to me less than a beneficial step.

Although as Paul Secunda of Workplace Prof Blog points out in his approving comment on the decision, there  is an argument that it does not apply to ADEA cases, it appears likely that the Court intended it for Title VII and other statutes that use similar language:

The statute is very similar to Title VII, which prohibitsemployment discrimination "because of . . . race, color,religion, sex, or national origin" and states that suchdiscrimination is established when one of those factors "was a motivating factor for any employment practice,even though other factors also motivated the practice."

If there is any good news, it is that the Court remanded the case to the 7th Circuit for application of its newly articulated rule in determining whether the jury verdict for Staub should be re-instated or a new trial granted. The basis is that the trial court's instruction did not conform to the "rule we adopt today". Perhaps that learned bench can shed some early guidance.

Goodness knows we will all need some.

This is another case where not only bad facts, but a bad procedural background made it an unfavorable case for employers. The Court was faced with a case where the appellate court had reversed a jury verdict, which meant that all facts had to be construed in the most favorable of light to the employee. Also the fact that it was a USERRA case, here a military reservist, is not the best context in today's world with two wars and numerous military personnel being asked for extraordinary measures, for any case focusing on the whether or not an employee was treated badly.

Although I have long felt this, I think today's decision makes it more clear that the Supreme Court although still adhering to the broad notion that courts should not function as super-human resources departments, second-guessing the decisions of an employer, have and continue to create a set of rules that at least encourages, if not requires, the lower courts to be just that.