One More Reason to Review your Contracts
As noted in an earlier news post, arbitration clauses are enforceable and are worth considering given that arbitration is more efficient, certain, and economical than litigation and jury trials. Arbitration proceedings, unlike judicial proceedings in a court, are a private process not open to the public. In addition, arbitrators have an ethical obligation to keep the information presented to them during arbitration proceedings and the arbitration award confidential. This is just another reason business owners should consider including arbitration clauses in their contract.
If you are a business which already has an arbitration provision in its contracts and you want to do all that you can to ensure that the arbitration proceedings remain confidential, there is one more thing you need to consider. If the arbitration provision does not include language requiring the parties to the contract to keep the arbitration proceedings and any arbitration award confidential, there is nothing to stop a party or counsel for a party from publicizing the proceedings or even publishing the arbitration award on social media or a firm website in an attempt to solicit more clients. It is not enough for your contract to simply say that arbitration proceedings will be conducted by the American Arbitration Association (AAA) because the AAA takes no position on whether the parties are free to disclose information concerning the arbitration proceedings or the arbitration award. The AAA does, however, recognize that the parties have the right to include a confidentiality agreement as part of their arbitration clause.
Please contact me if you would like me to review your arbitration clause and give you some thoughts.