Labor & Employment Law Daily Collegial relationship between arbitrator and counsel didn’t establish evident partiality
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Wednesday, July 21, 2021

Collegial relationship between arbitrator and counsel didn’t establish evident partiality

By Brandi O. Brown, J.D.

After the arbitrator ruled against her, the former Cigna employee learned that he was friends with one of Cigna’s counsel of record.

Although a picture may be worth a thousand words, the story of a friendship they told in the case of a discharged Cigna employee was not sufficient to establish a arbitrator’s evident partiality or bias. “At best,” the Eleventh Circuit explained in an unpublished decision, the employee, who argued that the arbitrator, who was photographed arm in arm with one of Cigna’s attorneys of record in their arbitration dispute, offered “mere speculation of unfair bias based on a photograph from a birthday party,” which could not create a reasonable impression of partiality under the circumstances. The attorney pictured was one of the attorneys of record for Cigna, but he was not “handling the day-to-day matters in the arbitration proceeding” for the employer. Accordingly, the appeals court upheld a district court decision denying the employee’s motion to vacate the arbitration award (Perez v. Cigna Health and Life Insurance Company, July 13, 2021, per curiam, unpublished).

In 2017, when she was fired, the employee mailed Cigna a demand for arbitration to settle her allegations that it wrongfully terminated her in violation of federal and state laws. She had signed an arbitration agreement with the employer previously. A few weeks later the American Arbitration Association sent her and the employer a list of arbitrators of selection, with curriculum vitae. Cigna was represented by Littler Mendelson and the employee was representing herself.

Arbitrator’s history with employer’s firm. Initially the employee and employer were unable to agree on an arbitrator, but eventually they settled on one from the list. Cigna’s counsel reminded the employee that the arbitrator she had ranked at the top of her list had worked in the Littler office previously. The arbitrator, after he was selected, added to this, telling the parties that he had been a shareholder with Littler and had worked there for several years before leaving to focus on a mediation and arbitration practice. He noted that he never handled any matters for Cigna. Neither party objected to him serving as arbitrator thereafter.

Did not mention friendships. However, after the arbitrator entered summary judgment in favor of the employer on all of the employee’s claims, she moved under the FAA to vacate the decision. She alleged that the arbitrator failed to disclose his friendship with one of Cigna’s counsel of record. A magistrate judge issued a report and recommendation recommending that the district court deny her motion, relying on the fact that the arbitrator had already disclosed his relationship with the law firm and that, even if he should have disclosed personal friendships with some of its attorneys, the employee did not present sufficient evidence of a compromising connection or bias. Over the employee’s objections, the district court adopted the Report and Recommendation. The employee appealed.

Reasonable impression of impartiality. Noting that its review of arbitration awards is “narrowly limited” and that the FAA assumes courts will confirm arbitration awards, the court explained that the employee’s argument was under one of the four reasons for vacating an award—where there is “evident partiality or corruption in the arbitrators.” Evident partiality requires either an actual conflict or that the arbitrator knows of, but does not disclose, information that would lead a reasonable person to believe a potential conflict existed. Non-disclosure was the problem in this case, according to the employee, and thus she bore the burden of establishing that the undisclosed facts created a “reasonable impression of partiality.” The mere appearance of bias is not sufficient; instead, it must be “direct, definite and capable of demonstration rather than remote, uncertain and speculative.”

Problematic photograph. According to the employee, a picture of the arbitrator and one of Cigna’s attorneys of record standing arm in arm at the arbitrator’s 50th birthday party gave that reasonable impression. She alleged that it established that the two attorneys had an undisclosed relationship and that their friendship demonstrated bias. However, the court noted, the arbitrator disclosed that he was a former shareholder with the firm for seven years and it followed, necessarily, from that disclosure that he would likely have friendship with some of the firm’s employees. To the extent that the friendship should have been separately disclosed, alone that fact did not suggest evident partiality. The employee did not provide an additional basis that might give a reasonable impression of partiality either, such as financial incentives or concurrent representations involving the arbitrator and Cigna’s counsel.

Speculative at most. “At best,” the court concluded, the employee offered “mere speculation of unfair bias based on a photograph from a birthday party, which is ‘too remote, uncertain and speculative’ to create ‘a reasonable impression of partiality’—particularly where the attorney in question was not counsel handling the day-to-day matters in the arbitration proceeding for Cigna.”

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