Equal Employment Opportunity Commission v. Sterling Jewelers, Inc.
Filing
200
SUPPLEMENTAL DECISION AND ORDER : Proposed Confidentiality Order 187 is amended as set forth herein. Sterling shall submit a confidentiality order for Judge McCarthy's signature with the modifications set forth herein by October 17, 2011. Signed by Hon. Jeremiah J. McCarthy on 10/7/11. (DAZ)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
______________________________________
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff,
SUPPLEMENTAL DECISION
AND ORDER
08-CV-00706-RJA-JJM
v.
STERLING JEWELERS INC.,
Defendant.
_____________________________________
On June 23, 2011 I issued a Decision and Order [183] granting in part and
denying in part the motion of defendant Sterling Jewelers Inc. (“Sterling”) for entry of a
confidentiality order [103]. My Decision and Order directed that Sterling submit a proposed
confidentiality order consistent with the decision by July 6, 2011 [183], p. 12. Sterling did so
(“proposed confidentiality order”) [187] and the Equal Employment Opportunity Commission
(“EEOC”) objects to certain aspects of the proposed confidentiality order as being inconsistent
with my Decision and Order [188]. It also argues that while my Decision and Order [183]
addressed the key areas of dispute, it did not address other disputed topics. Id. The claimants in
the parallel arbitration of Jock, et al. v. Sterling Jewelers Inc., AAA Case No. 1 160 00655 08
(the “arbitration claimants”) have filed similar objections to the proposed confidentiality order
[189], and Sterling has responded [195].
To the extent clarification or expansion of my June 23, 2011 Decision and Order
[183] is necessary, this decision is intended to supplement that decision.
BACKGROUND
The only procedural change since my prior Decision and Order has been that the
Second Circuit reversed the decision of Hon. Jed S. Rakoff vacating the arbitration award
permitting the plaintiffs to pursue class certification. See Jock v. Sterling Jewelers Inc., 646 F.3d
113, (2d Cir. 2011).
ANALYSIS
Whether or not the EEOC’s objections were timely or adequately raised I will
address them because they are germane to the propriety of the proposed confidentiality order.
A.
Paragraphs 4 & 5:
Definition of Arbitration Proceedings and
Arbitration Claimants
The proposed confidentiality order defines “Arbitration Proceeding” as the
proceeding captioned Jock, et al. v. Sterling Jewelers Inc., AAA Case No. 1 160 00655 08.
Likewise, it defines the “private arbitration claimants” as the named claimants in the related
arbitration proceeding. [187], ¶¶4, 5. The EEOC and the arbitration claimants argue that
because the arbitrations may go forward on an individual basis, there is no reason to restrict the
definition of arbitration claimants to only those named claimants in the class arbitration
proceeding. EEOC’s objections [188], pp. 1-2; arbitration claimants’ objections [119] p. 2. I
agree.
At this point, it is unclear how the arbitrations will proceed. Thus, paragraph 4 of
the proposed confidentiality order [187] shall be amended to state that “‘arbitration proceeding’
means the arbitration proceeding captioned Jock, et al. v. Sterling Jewelers Inc., AAA Case No.
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11 160 00655 08, currently pending before the American Arbitration Association , as well as any
related individual arbitration proceedings”. Likewise, I order that paragraph 5 of the proposed
confidentiality order [187] be amended to state that “‘private arbitration plaintiffs’ means the
named claimants in related arbitrations proceedings”.
B.
Paragraph 6: Arbitration Claimants as Signatories to the Confidentiality Order
The proposed confidentiality order omits the arbitration claimants as signatories
([167], ¶6, p. 13). The EEOC argues that the arbitration claimants should be parties to the
proposed confidentiality order to “protect not only documents that Sterling may produce and that
EEOC may share with the Arbitration Claimants, but will also protect confidential documents
concerning the Arbitration Claimants themselves, which either Sterling or the arbitration
claimants may produce”. EEOC’s Objections [188], p. 2; arbitration claimants’ objections [189].
pp. 1-2.
The EEOC’s concern over protecting Sterling’s documents which it may share
with the arbitration claimants is unfounded. If discovery deemed “confidential information”
under the confidentiality order is provided to the arbitration claimants in this litigation, they will
be bound by the confidentiality order. [187], ¶15 (“[a]ll persons to whom confidential material is
disclosed pursuant to this Order will be bound by this Order”).
It is also not necessary for the arbitration claimants to be parties to the
confidentiality order in order to protect their privacy concerns. Under the proposed
confidentiality order, all “personal or financial information subject to privacy law protection
concerning . . . [Sterling’s] current and former employees, or any putative member of the class of
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persons Plaintiff seeks to represent, including wage statements, health records or information,
bank account statements, credit reports, and credit applications” are deemed to be confidential
information [187], ¶11(b). It also provides that “[i]f a third party provides discovery to any party
in connection with this action, that third party may designate that discovery as Confidential
Information under the Confidentiality Order” Id., ¶26.
To the extent the arbitration claimants seek to be included as signatories to the
confidentiality order “to ensure that they may access the materials in this action” (arbitration
claimants’ objections [189], p. 1), that goal has been accomplished without the need for them to
become parties to the confidentiality order.
C.
Paragraph 10: The EEOC’s Right to Use Confidential Information
in Other Enforcement Activities
The EEOC argues that the proposed confidentiality order should be modified to
permit it to use confidential information in other enforcement activities where Sterling is a party,
so long as the EEOC continues to treat such information as confidential. EEOC’s Objections
[188], p. 2. For example, it argues that if “one or more class members were to file their own
charges of discrimination, it would make no sense for EEOC to have to ignore the information
that it already has available to it and to instead start an investigation from scratch”. Id.
For same reasons I permitted the EEOC to share confidential information with the
arbitration claimants and did not prohibit them from using such information in their arbitrations
(Decision and Order [183], pp. 4-8), I likewise conclude that the EEOC may use confidential
information in its enforcement actions against Sterling, but only with respect to enforcement
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activities that are related to this litigation. Therefore, I order that the following be added to
paragraph 10 of the proposed confidentiality order:
“EEOC may use Confidential Information in furtherance of its
enforcement activities in any related matter in which the party
designating such information as confidential has been named as a
party, but must treat such information as confidential pursuant to
the terms of this Order, until such time as the confidential
designation is withdrawn either by agreement of the parties or by
court order”.
D.
Paragraph 10: Barring Individuals from Proceedings
The proposed confidentiality order states that “[t]he Producing Party may file a
motion seeking to have any person(s) not permitted access to Confidential Information under this
Order to be barred from attending any portion of trial. The Producing Party may also request that
any such person by barred from attending any portion of a motion hearing or depositions at which
Confidential Information is revealed” [187], ¶10. The EEOC recognizes that “[n]othing prevents
the parties from making such a motion”, but argues that there is no basis to suggest that “such an
extraordinary measure is a reasonable prospect”. EEOC’s Objections [188], p. 2.
Whether or not restricting individuals from access to proceedings in this case is a
reasonable prospect, the parties have the right to bring such a motion with or without this
provision. Therefore, this provision shall remain.
E.
Paragraph 11: Applicability to Information Obtained Outside
of Discovery in this Litigation
The proposed confidentiality order provides that “all allegations of purported
criminal and/or lewd or lascivious conduct that has not been substantiated by a court of law,
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regardless of the source of the information” constitute confidential information [187], ¶11(g).
EEOC argues that this language “appears on its face to restrict the ability of individuals to
communicate or disseminate materials that they have obtained outside discovery in this case”.
EEOC’s objections [188], p. 3. I disagree. In fact, the proposed confidentiality order makes
clear that “[t]he restrictions and obligations [of the] Confidentiality Order . . .will not apply to
any information which . . . is in Receiving Party’s legitimate possession independent of the
Producing Party” [187], ¶24.1
F.
Paragraph 14(c): Disclosure to Arbitration Claimants’ Experts
The proposed confidentiality order states that confidential information “may be
used solely for purposes of this action or the Arbitration Proceeding, subject to obtaining leave to
use the Confidential Information in the Arbitration Proceeding(s) from the arbitrator” [187], ¶10.
The EEOC argues that this provision would not allow the arbitration claimants to provide
information obtained in this litigation to any outside experts or consultants. EEOC’s Objections
[188], p. 3. It proposes that paragraph 14(c), pertaining to those who will have access to
confidential information, be amended to state “outside experts or consultants for a receiving
party whose advice and consultation are being considered or will be used by such party solely in
connection with this action or in connection with the Arbitration Proceedings” [156], Ex. 1,
¶14(c).
1
Although not raised by EEOC, consistent with my June 23, 2011 Decision and Order,
paragraph 11(f) should be modified as follows: “Information designated as ‘Confidential’ under this
subparagraph and subparagraph (g) must be produced to the Court for review”.
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Unless and until the arbitration claimants obtain permission from the arbitrator to
use the confidential information in the arbitration proceeding, the arbitration claimants have no
reason to disclose the confidential information to their experts and consultants. However, the
EEOC’s proposal seemingly permits disclosure to the arbitration claimants’ experts and
consultants, without regard to whether the arbitrator has permitted use of the confidential
information in the arbitration proceedings. Therefore, I order that paragraph 14(c) of the
proposed confidentiality order be amended as follows:
“outside experts or consultants for a receiving party whose advice
and consultation are being considered or will be used by such party
solely in connection with this action or by the Private Arbitration
Plaintiffs in connection with the Arbitration Proceeding provided
that they first receive permission from the arbitrator in the
Arbitration Proceeding to use such information, including their
stenographic and clerical personnel.
G.
Paragraph 19: Time Period for Challenging Confidentiality Designations
The proposed confidentiality order requires that objections to confidentiality
designations be raised within 30 days of receipt [187], ¶19. The EEOC argues that “requiring a
receiving party to challenge any confidentiality designations within 30 days of receiving them
would impose an impossible burden on EEOC, particularly given the broad scope of the
confidentiality order, the fact that Sterling has represented to the Court that potentially millions
of documents will be produced, and that Sterling has designated nearly every document produced
so far as confidential”. EEOC’s Objections [188], p. 3. Thus, it proposes that challenges to
designations be permitted at any time. Id.
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Although I am sensitive to the burden this time limitation places on the EEOC, in
order to ensure that discovery progresses, the ability of the parties to challenge confidentiality
designations cannot be left open-ended. Therefore, I order that the 30-day period be extended to
120 days. See In re September 11 Litigation, 262 F.R.D. 274, 276 (S.D.N.Y. 2009) (imposing a
similar time limitation).
H.
Paragraph 21: Inadvertent Disclosures
The proposed confidentiality order states, in relevant part, that “[t]he inadvertent
or unintentional disclosure by any party of Confidential Information, regardless of whether that
information was so designated at the time of the disclosure, will not be deemed a waiver of a
party’s claim of confidentiality” [187], ¶21. The EEOC proposes that a provision be included in
this paragraph indicating that it “will also apply to the inadvertent disclosure of information to
the parties in the arbitration proceedings” [156], ¶21. It argues that “[s]ince EEOC will be
sharing information with the arbitration claimants, and they in turn may produce that information
to Sterling, including this provision protects all parties from inadvertent disclosures”. EEOC’s
Objections [188], ¶8.
The purpose of the confidentiality order is to govern the exchange of Confidential
Information in this case. If the arbitration claimants produce information to Sterling in the
arbitration proceedings, which they obtained from the EEOC and is not designated as
Confidential Information, such production will be governed by the arbitration proceedings, not
this case. Therefore, I conclude that this provision is unwarranted.
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I.
Paragraph 22: Production of Signed Acknowledgments
The EEOC argues that contrary to my June 23, 2011 Decision and Order,
“Sterling’s proposal would require a party to disclose executed acknowledgments if the party
inadvertently discloses confidential information to unauthorized persons”. EEOC’s Objections
[188], p. 4. However, because paragraph 22 of the proposed confidentiality order omits this
requirement, that concern is unfounded.
J.
Paragraph 25: Timing for the Return and Destruction of Documents
The proposed confidentiality order provides that “[a]fter final termination of this
action, a Producing Party may request the return or destruction of all Confidential Information”
[187], ¶25. The EEOC argues that although “the Court has ordered that the arbitration claimants
may share information exchanged in this case, . . . . Sterling’s proposal would require documents
to be returned or destroyed even if the Arbitration Proceedings were ongoing” [188], p. 4. It
proposes that the proposed confidentiality order be amended to reflect state “[a]fter final
termination of this action and the Arbitration Proceedings” [156], Ex. 1, ¶26.
To the extent the arbitration claimants are required under the terms of the
confidentiality order to destroy or return Confidential Information obtained in this case, they
should, subject to the arbitrator’s approval, have the ability to use this material for the duration of
their arbitrations. Therefore, I order that the following be added to paragraph 25 of the
proposed protective order:
“Except that the destruction or return of Confidential Information
in the possession of the Private Arbitration Plaintiffs may be stayed
until after the conclusion of the Arbitration Proceeding provided that such
material is being used in the Arbitration Proceeding.”
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K.
Paragraph 32: Sanctions for a Breach
The proposed confidentiality order states that “[i]f any Confidential Information is
used or disclosed by either party in a manner not consistent with this agreement, the Confidential
Information that was wrongfully disclosed shall be inadmissible in the above captioned action at
the producing party’s discretion” [187], ¶32. The EEOC argues that this provision is “draconian”
and proposes that the court determine what, if any, sanctions should be imposed for a breach.
EEOC’s Objections [188], p. 4.
The potential exists for varying degrees of culpability and non-compliance with
the confidentiality order. Thus, rather than imposing an absolute penalty for any level of conduct
that is not consistent with the confidentiality order, I order that this provision be amended as
follows:
“If any Confidential Information is used or disclosed by either
party in a manner not consistent with this agreement, the court may
impose appropriate sanctions, including precluding the use of such
information in this case”.
CONCLUSION
For these reasons, the proposed confidentiality order [187] is amended as set forth
herein. Sterling shall submit a confidentiality order for my signature with the modifications set
forth herein by October 17, 2011.
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SO ORDERED.
Dated: October 7, 2011
/s/ Jeremiah J. McCarthy
JEREMIAH J. MCCARTHY
United States Magistrate Judge
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