Arbitration Confidentiality Clashes with Courts

By Leslie King O’Neal

Confidentiality is Key in Arbitration

Everything in Arbitration Isn’t Automatically Confidential

Lawyers and parties are sometimes surprised to learn that these confidentiality rules don’t automatically apply to parties and witnesses in arbitration proceedings.  Documents and other evidence submitted in arbitration hearings aren’t automatically confidential. Possible solutions include adding confidentiality requirements to the arbitration agreement, entering into a confidentiality agreement at the outset of a case or afterward, or requesting the arbitrator enter a protective order.  For further discussion see post: Confidentiality in arbitration-and afterward – The Construction ADR Toolbox.

Arbitration Confidentiality Clashes with Open Access to Court Records

Motion practice before and after arbitration hearings creates significant challenges to maintaining confidentiality. Sometimes parties purposely file motions to evade arbitration confidentiality.[ii] Arbitration confidentiality clashes with the presumption of public access to courts under the First Amendment,[iii] as a recent decision from the Southern District of New York exemplifies.

Jean-Phillipe Maheu v. Twitter—When Should an Award be Sealed?

 In Jean-Philippe Maheu v. Twitter[iv] plaintiff petitioned to confirm the arbitration award. Later, he requested the award be filed under seal because Twitter didn’t want the award to be public.[v] The court denied the request, finding it insufficient to overcome the “potent and fundamental presumptive right of public access” to the award. The court noted that plaintiff didn’t request sealing the award when he first filed the confirmation petition. The court interpreted this as indicating disclosure would not cause him substantial harm.

Establishing Basis for Sealing Award

The parties agreed there was a First Amendment right of access to the petition to confirm and the attached award.[vi] The court noted that the party requesting sealing the record must establish through “specific, on the record findings . . . that closure is essential to preserve higher values and is narrowly tailored to serve that interest.”

Rejecting the parties’ claim sealing was necessary because the award was “the product of a confidential arbitration process” and contained the “contents and results of the arbitration,” the court stated, “The preservation of an arbitral award, by itself, is not a ‘higher value’ that overcomes the presumption of access afforded by the First Amendment.”[vii] The court cited other courts’ rulings that the mere existence of a confidentiality agreement is insufficient to overcome the access presumption. Courts consistently refuse to seal petitions to confirm arbitration awards even when there are confidentiality agreements.[viii]

Specific Factual Basis Showing Harm Required

Although the award contained financial information about plaintiff, none of the parties submitted any affidavits or factual proffers about how plaintiff would be harmed if the award were made public. Thus, the court found no factual basis to conclude that disclosing the dollar amount of the award would harm plaintiff. The district court stayed its decision, giving the parties time to appeal to the Second Circuit Court of Appeals.

What Will the Second Circuit Do?

This result is somewhat at odds with recent Second Circuit opinions on arbitral confidentiality. In a pair of 2023 decisions, the Second Circuit (described by one commentator as “the most active federal appellate court for commercial arbitrations[ix]) the Court referred to the “FAA’s strong policy in favor of confidentiality” and stated, “confidentiality is a paradigmatic aspect of arbitration.”[x] The Second Circuit also reminded district courts to consider the purposes of a request to seal or unseal a document.  In Stafford v. Int’l Bus. Machs. Corp.[xi] the Second Circuit noted that the plaintiff was misusing the litigation process to enable her counsel to use the award to attract other former IBM employees as clients.

Should Courts Change Their Confidentiality Stance?

Marc J. Goldstein, a frequent commentator on arbitration, notes that loss of arbitration confidentiality in court filings may make parties less likely to select arbitration for dispute resolution. He suggests courts and attorneys should collaborate on changes to the open access presumed under the First Amendment, striking a balance between such access and FAA confidentiality. He thinks this may discourage parties from attaching confidential documents to court filings as a strategy for compliance or settlement.

Takeaways

• Not everything in arbitration is automatically confidential. Where confidentiality is critical, consider including confidentiality language in the arbitration agreement. See Stafford case for an example of confidentiality language.
• Before filing confidential information in court, check local rules for sealing files and follow them.
• When moving to seal an award, do so promptly and be prepared to offer evidence via affidavit or proffer showing how disclosure will specifically harm the movant.

---

[i] Rule R-45, AAA Construction Industry Arbitration Rules and Mediation Procedures; Rule 26(a), JAMS Construction Arbitration Rules & Procedures.

[ii] A recent blog post describes “arbitration guerilla tactics” such as filing suit to enjoin arbitration or assert allegedly non-arbitrable claims against non-signatories with unsealed exhibits, thus undermining confidentiality. Marc J. Goldstein, Arbitration Commentaries, www.lexmarc.us, June 22, 2025.

[iii] The First Amendment right of access to documents is analytically distinct from the common law right of access to judicial documents. The common law right attaches with different weight, depending on: (1) the document’s role in exercising Article III judicial power and (2) the document’s value to those monitoring the federal courts. The common law right is also balanced against the interest of secrecy.

[iv] Case 1:25-cv-00836-GHW, filed 6/20/25 https://storage.courtlistener.com/recap/gov.uscourts.nysd.635857/gov.uscourts.nysd.635857.32.0.pdf; “Twitter” is now known as “X.”

[v] This is the better practice. Compare Chicago Bridge & Iron Co., N.V. v. Refinero De Cartagena S.A.S. (Case No: 1:23-cv-4825-GHW S.D.N.Y. June 9, 2023) (order denying motion to seal court file where Petition to Vacate Arbitration Award (and attached award) were filed without prior filing of a motion to file civil case under seal according to the court’s local rules).

[vi] While not specifically mentioned in the First Amendment, the U.S. Supreme Court and other federal and state courts have consistently recognized that the public and press have a “presumptive First Amendment right of access to judicial proceedings in criminal cases.” Courts have held the right of access includes civil cases also. See, The Roots of Access Rights, Reporters Committee for Freedom of the Press, https://www.rcfp.org/open-courts-compendium/overview/ (last accessed 6/30/25). In addition to the First Amendment right, courts recognize a common law right of access. Nixon v. Warner Commc’ns, Inc., 435 U.S. 589 (1978) (denying release of Watergate tapes for commercial purposes). https://caselaw.findlaw.com/court/us-supreme-court/435/589.html.

[vii] Citing Lohn v. Int’l Bus. Machines Corp., 2022 WL 36420 at *13 (S.D.N.Y. 2022).

[viii] Citing Park Ave. Life Ins. Co v. Allianz Life Ins. Co. of N. Am., 2019 WL 4688705 at *3 (S. D. N. Y. 2019)

[ix] Marc J. Goldstein, Arbitration Commentaries, supra note ii.

[x] Stafford v. IBM, 78 F.4^th 62, 71 (2d Cir. 2023) (sealing award proper where motion to confirm was moot since award was paid and filing was to help attorney get other clients) https://www.casemine.com/judgement/us/64dc50d0a752d32541fb592c

and In re IBM Arbitration Agreement Litigation, 76 F.4^th 74, 81 (2d Cir. 2023) (sealing documents upheld when attached to a moot motion for summary judgment in attempt to evade confidentiality agreement) https://caselaw.findlaw.com/court/us-2nd-circuit/114809558.html

But see, Major League Baseball Players v. Arroyo, https://scholar.googl https://caselaw.findlaw.com/court/us-2nd-circuit/114809558.html e.com/scholar_case?case=9976612403032594927&hl=en&as_sdt=6&as_vis=1&oi=scholarr (S.D.N.Y. June 17, 2024), (rejecting proposed sealing order and not accepting FAA recognition of contract-based confidentiality as counter to open court access).

[xi] 78 F.4^th 62 (2d Cir. 2023)