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<xTITLE>Confidentiality in Federal Alternative Dispute Resolution Programs (2000)</xTITLE>

Confidentiality in Federal Alternative Dispute Resolution Programs (2000)

by Federal Alternative Dispute Resolution Council
Full PDF Version

Introduction. The subject of the document is confidentiality, which is a critical component of a successful ADR process. Guarantees of confidentiality allow parties to freely engage in candid, informal discussions of their interests in order to reach the best possible settlement of their claims. A promise of confidentiality allows parties to speak openly without fear that statements made during an ADR process will be used against them later. Confidentiality can reduce posturing and destructive dialogue among parties during the settlement process.

Public comment was solicited on a draft of this document that was published in the Federal Register at 65 FR 59200, October 4, 2000. The draft was revised to incorporate many suggestions on the draft received from the following private sector organizations, government agencies, and individuals from around the country:

American Bar Association, Section of Administrative Law and Regulatory Practice
American Bar Association, Section of Dispute Resolution
Association of the Bar of the City of New York, Committee on Alternative Dispute Resolution
Executive Council on Integrity and Efficiency
Federal Mediation and Conciliation Service
Martin J. Harty
Lawrence A. Huerta
Oregon Department of Agriculture Farm Mediation Program
Margaret Porter, Administrator, Federal Sharing Neutrals Program
Karen D. Powell
President’s Council on Integrity and Efficiency
Texas Center for Public Policy Dispute Resolution
United States Department of Agriculture, Office of Inspector General
United States Department of Energy, Chicago Operations Office
United States Department of Transportation, Federal Aviation Administration
United States Institute for Environmental Conflict Resolution
Richard C. Walters

Major comments fell primarily into three categories. The first is the interplay of the ADR Act confidentiality provisions with federal “access” statutes that provide Federal entities authority to seek access to certain classes of information. The second is the extent of confidentiality protection for statements of parties made in joint session. The third is the model statement on confidentiality for neutrals to read to parties at the beginning of a mediation.

The ADR Council believes that the understanding of these issues will benefit from experience and further collaboration with a broader community. The Council recognizes that its timetable for comments to this document was limited and wants to make clear that it anticipates further discussion of these issues. Future research, analysis, and practical experience in the field are certain to have a continuing impact on these important areas, and this Guidance may need to be revised or updated. We look forward to cooperation with interested parties in this work.

The Relationship Between the ADR Act and Other Authorities. The largest number of comments concerned the relationship between ADR Act confidentiality guarantees and other laws or regulations that authorize access to certain classes of information. Some commenters suggested that confidentiality should be narrower than provided under the draft Guidance. For example, some commenters believed that threats of physical harm and statements concerning ongoing or future criminal activity should not be confidential. Other commenters stated that Federal statutes providing access for government investigatory agencies should override the ADR Act’s confidentiality guarantees.

In sharp contrast, other commenters believed that the confidentiality guarantees in the draft should be much broader. Several commenters argued that the ADR Act prohibitions on disclosure take precedence over any other Federal statute. These commenters argue that the ADR Act allows Inspectors General and other investigators to obtain confidential communications only through a court order obtained pursuant to the Act. The Federal ADR Council acknowledges the points of view expressed in these comments but does not concur with them. There does not appear to be an easy answer to the tension between these authorities. While the ADR Act’s confidentiality provisions are clear, the access provisions of other statutes are equally clear.

Standard techniques for resolving statutory conflicts do not provide a ready answer in this situation. For example, arguments have been made on both sides as to which statute is more specific. While the ADR Act specifically addresses the types of processes to which it applies, some have argued that other acts, such as the Inspector General Act, do the same by specifically describing the types of information that may be requested and the purposes for which a request can be made. Nor does the legislative history of the ADR Act provide an apparent solution, as it does not appear to contain any mention of this conflict. A further problem is that the Federal ADR Council is not the appropriate body to provide a final decision on this question. The Council is an advisory body created by the Attorney General to issue guidance, but it is not authorized to promulgate binding interpretations in the manner of a court.

While it is, of course, appropriate to give this matter careful attention, we note that the circumstances when confidentiality might be challenged are, based on our experience, rare. The Council believes that there are opportunities for ADR programs and Federal requesting entities to establish good working relationships such that disputes over demands for disclosure of confidential communications can be minimized. This report continues to endorse a cooperative approach of this nature.

In addition, the revised report endorses use of the standards in the ADR Act’s judicial override provision, sections 574(a)(4) and (b)(5), stating that they should be used both formally, when available, and informally to resolve the rare instances where requesting entities seek access to communications protected by the ADR Act.

The Confidentiality of Statements Made in Joint Session. Many comments were also received concerning the extent of confidentiality protection for statements made by parties in joint session. The draft report stated that there is no confidentiality protection for a party’s dispute resolution communications that are available to all other parties, such as comments made or documents shared in joint session. Commenters noted that the guidance on this issue differs from traditional ADR practices and party expectations regarding confidentiality, and said this interpretation could reduce the utility of joint sessions. One commenter suggested that the report’s interpretation of section 574(b)(7), the key provision on this point, would render sections 574(b)(1)-(6) superfluous. Further, this commenter noted that comments by several legislators and a Senate report indicate 574(b)(7) was intended to cover only documents, not oral statements.

The Federal ADR Council acknowledges that the ADR Act’s treatment of this issue is different from the practice in many ADR processes that do not involve the government, but notes that the language of the statute is difficult to overcome. The Act states that there is no confidentiality protection if “the dispute resolution communication was provided to or was available to all parties in the dispute resolution proceeding.” 5 U.S.C. 574(b)(7).

Communications in a joint session with all parties present fit squarely within this provision. Further, the Act’s definition of dispute resolution communication contains no exception for oral statements. Indeed, it explicitly includes “any oral or written communication prepared for the purposes of a dispute resolution proceeding” (emphasis added). Despite the language of (b)(7), it appears that the remaining provisions of 574(b) provide protection for limited types of communications. These other sections continue to protect, for example, a party who is asked what a mediator said at any time, or a party who is asked what another party said in a multi-party case when not all parties were present. With regard to legislative history, an indicator of Congressional intent is the report of the final Conference Committee in 1996, when the current statute was enacted. It states, “A dispute resolution communication originating from a party to a party or parties is not protected from disclosure by the ADR Act.” H.R. Rep. No. 104-841, 142 Cong. Rec. H11,110 (September 25, 1996). The Committee could have used the word “document” if it wanted to exclude oral statements, but it chose to use the term “dispute resolution communication,” which is explicitly defined in the statute to include oral statements.

The Council does recognize that this provision could hinder a party’s candor in a joint session, and therefore the Guidance suggests that parties address this issue through the use of a contract. Confidentiality agreements are a standard practice in many ADR contexts, and their use is encouraged in Federal dispute resolution processes where confidentiality of party-to-party communications is desired. It is important to note that confidentiality agreements do not bind anyone who is not a signatory. Further, such agreements will not protect against disclosure of documents through the Freedom of Information Act (FOIA). Nevertheless, the majority of problems caused by the plain language reading of section 574(b)(7) can be rectified through a well-drafted confidentiality agreement.

The Model Confidentiality Statement for Use by Neutrals.
Finally, many commenters made suggestions regarding the Model Confidentiality Statement for Use by Neutrals that appeared at the end of the draft report. Some commenters argued that provisions should be added to the statement to ensure parties were made aware of additional possible confidentiality exceptions. Others stated that the statement was already too complex and potentially chilling. The Council appreciates the difficulty in making an opening statement complete enough to put parties on notice of important issues, while not making it so exhaustive that it discourages participation in ADR. The Council acknowledges that a welldrafted statement should accommodate all of these concerns as well as possible. Other commenters noted that the statement may not be appropriate for all types of proceedings or all types of neutrals. The Federal ADR Council agrees that the model statement may not fit all situations and all ADR processes, or even all stages of a single ADR process. In response to these comments, the Guidance now includes a set of guidelines for neutrals to use in developing their own statements on confidentiality, appropriate to the situation. It is the neutral’s responsibility to address confidentiality with the parties. Neutrals and agency ADR programs may want to develop a standard confidentiality statement, consistent with the guidelines presented in this report, that is appropriate to a particular ADR process. The Guidance also includes an example of one possible confidentiality statement. It is important to note that this statement should be tailored, as necessary, to fit the needs of each particular case. This statement refers to a mediation, because mediation is the most common ADR process in the Federal government.

The balance of this revised report follows the same format as the draft report. Section I is a reprint of the confidentiality provisions of the ADR Act. Section II is a section-by-section analysis of the confidentiality provisions of the Act. Section III contains the revised questions and answers on confidentiality issues likely to arise in practice. Section IV contains the new guidelines for use in developing confidentiality statements. In addition, as assistance for neutrals and agencies drafting confidentiality statements, Section IV contains an example of one possible confidentiality statement.

Nothing in these guidance documents shall be construed to create any right or benefit, substantive or procedural, enforceable at law or in equity, by a party against the United States, its agencies, its officers or any other person.

The Federal ADR Council
Chair: Janet Reno, Attorney General, Department of Justice Vice Chair: Erica Cooper, Deputy General Counsel, Federal Deposit Insurance Corporation Members: Leigh A. Bradley, General Counsel, Department of Veterans Affairs; Meyer Eisenberg, Deputy General Counsel, Securities and Exchange Commission; Mary Anne Gibbons, General Counsel, U.S. Postal Service; Gary S. Guzy, General Counsel, Environmental Protection Agency; Jeh C. Johnson, General Counsel, Department of the Air Force; Stewart Aly, Acting Deputy General Counsel, Department of Defense; Rosalind Knapp, Acting General Counsel, Department of Transportation; Anthony N. Palladino, Director, Office of Dispute Resolution, Federal Aviation Administration, Department of Transportation; Janet S. Potts, Counsel to the Secretary, Department of Agriculture; Harriett S. Rabb, General Counsel, Department of Health and Human Services; Henry L. Solano, Solicitor, Department of Labor; John Sparks, Acting General Counsel, Department of the Navy; Peter R. Steenland, Jr., Senior Counsel for Dispute Resolution, U.S. Department of Justice; Mary Ann Sullivan, General Counsel, Department of Energy; Robert Ward, Senior Counsel for Dispute Resolution, Environmental Protection Agency.