Ch.29 – Confidentiality

The Administrative Dispute Resolution Act (ADRA) of 1996 places restrictions on the public release of dispute resolution communications exchanged in an ADR proceeding. 5 USC 574. Similarly, consistent with Federal Rule of Evidence (FRE) 408, the forums that entertain government contracts controversies generally deem as inadmissible the settlement discussions generated in an ADR proceeding.

Confidentiality under the ADRA of 1996

The ADRA affirmatively bans neutrals from voluntarily disclosing dispute resolution communications (and any communication provided in confidence to the neutral), unless one of four statutory exceptions apply. Paraphrasing the statute, these exceptions include: (1) all parties and the neutral agree in writing to the disclosure; (2) the communication has already been made public; (3) a statute requires publication, and only the neutral is reasonably available; and (4) a court orders release after employing a three-part test. 5 USC 574(a). Parties to an ADR proceeding have a similar prohibition on releasing information, but in addition to the four exceptions applicable to neutrals, three other exceptions allow a party to release: (1) its own statements; (2) dispute resolution communications relevant in disputes involving a settlement agreement reached in an ADR; and (3) a dispute resolution communication (except those generated by the neutral) that was provided or available to all parties to the ADR proceeding. Id. at 574(b).

The statute also contains other general exceptions. First, if a neutral receives a discovery request or other legal process seeking disclosure of dispute resolution communications, the parties must offer to defend the neutral or risk waiver of the confidentiality protection. Id. at 574(e). Second, communications can be used to a limited extent if a dispute arises between the neutral and a party. Id. at 574(i).

Admissibility of Settlement Discussions

Admissibility refers to whether a particular item (a document, testimony, etc.) may be included in the collection of evidence used to decide a case. The common law of evidence and FRE 408 have long restricted the admission of settlement discussions–like those in ADR–into evidence to prove or disprove liability or a defense. Although not bound by the Federal Rules of Evidence, the principles of FRE 408 are generally applied in protests and contract disputes. See e.g., Walsh/Davis JV v. GSA, CBCA No. 1460, 2012-1 B.C.A. (CCH) 34,968; Appeal of David Sahagian, PSBCA Nos. 3385, 3416, 94-2 B.C.A. (CCH) 26,688. See also, ODRA Procedural Regulation at 14 CFR 17.39(b).

Confidentiality of ADR Agreements and Resulting Settlements

The ADRA of 1996’s confidentiality protection covers dispute resolution communications. The definition of this term, however, expressly excludes “a written agreement to enter into a dispute resolution proceeding, or final written agreement or arbitral award reached as a result of a dispute resolution proceeding.” 5 USC 571(5). It should also be noted that confidentiality clauses in a settlement agreement may not withstand a request under the Freedom of Information Act (FOIA). Further, as a matter of policy, the Department of Justice restricts the use of confidentiality clauses in settlements that it signs. 28 CFR 50.23.

Further Reading

The Interagency ADR Working Group has published two guides on ADR Confidentiality:

• Confidentiality: “Protecting the Confidentiality of Dispute Resolution Proceedings: A Guide for Federal Workplace ADR Program Administrators” (April 2006) (PDF)
• Confidentiality: Guide to “Confidentiality in Federal Alternative Dispute Resolution Programs” (guidance to assist federal agencies in developing ADR programs) (December 29, 2000) (PDF)

Confidentiality, as it pertains to federal mediators, is also addressed in “A Guide for Federal Employee Mediators: A Supplement to and Annotation of the Model Standards of Conduct for Mediators Issued by the American Arbitration Association, the American Bar Association, and the Association for Conflict Resolution” ( May 9, 2006 ), issued by the Federal Interagency ADR Working Group Steering Committee.