Appeals Court Vacates $50K Arbitration Award Against Ex-Trump Campaign Staffer for Alleged NDA Violation
The appeals court specifically took issue with the fact that many of the statements underlying the campaign's claim that Denson violated her NDA were made as part of her lawsuit raising the harassment issues.
February 06, 2020 at 05:58 PM
5 minute read
A New York state appeals court has vacated a nearly $50,000 award that an arbitrator handed to President Donald Trump's campaign over allegations that a former staffer violated a non-disparagement agreement after she sued the organization for alleged harassment.
A four-judge panel of the Appellate Division, First Department ruled to nullify the arbitration award that ordered former Trump campaign staffer Jessica Denson to pay $49,506 for disparaging remarks she made in state court alleging she endured sex discrimination, retaliation and a hostile work environment during the 2016 election season.
According to the appeals court, the arbitrator's award in part went against public policy, and in other respects exceeded the scope of the defendant's arbitration demand. The appeals court specifically took issue with the fact that many of the statements underlying the campaign's claim that Denson violated her NDA were made as part of her lawsuit raising the harassment issues. According to the court, "there is a deep-rooted, long-standing public policy" that allows people to make statements in the course of court proceedings.
"By concluding that the allegations in the federal action are tantamount to disclosure of confidential information violative of the NDA, the arbitrator improperly punished plaintiff for availing herself of a judicial forum," the court said. "Defendant is hard-pressed to explain how plaintiff could have pursued her right without setting forth necessary factual statements for the federal court to consider."
READ THE OPINION:
Denson's attorneys, Maury B. Josephson of Uniondale, New York and David Bowles of Bowles & Johnson, said in a statement, "We are extremely gratified that four judges of the respected First Department Appellate Division unanimously invalidated the arbitration award against Ms. Denson on the grounds that it was overreaching and violated public policy. We can now go forth unhindered to pursue Ms. Denson's rights without fear of financial retaliation for doing so."
Denson, a California resident who worked as the former director of Hispanic engagement for the campaign, initially filed suit in Manhattan Supreme Court in November 2017, alleging a former male superior, Camilo Jaime Sandoval and the campaign itself slandered, harassed and sexually discriminated against her in violation of New York City's human rights laws. The campaign "compounded a slander crusade executed by Sandoval" that included the claim she was responsible for an illegal leak of Trump's taxes, "perpetuating a climate of fear and terror for the extent of her employment and beyond," Denson alleged.
In December 2017, Trump's attorney in the matter, LaRocca Hornik Rosen Greenberg & Blaha name attorney Lawrence Rosen, filed a demand for arbitration in state court. In it, he cited Denson's breach of confidentiality and non-disparagement obligations in the NDA she signed when she began with the Trump campaign. The violation, according to Rosen, was Denson's "publishing certain confidential information and disparaging statements in connection with a lawsuit she filed" in state court.
In March 2018, Denson also filed a declaratory judgment action in the Southern District of New York, arguing that the NDA had should be voided.
Although New York County Supreme Court Justice Arlene Bluth ruled in August 2018 that Denson's state law claims fell outside the scope of the arbitration clause, a few weeks later, U.S. District Judge Jesse Furman of the Southern District of New York determined that the federal case should go to arbitration.
Denson, however, did not fully participate in the arbitration process, citing Bluth's holding, and the arbitrator eventually determined that Denson breached the NDA. According to the First Department panel, the nearly $50,000 award was entirely related to attorney fees stemming from the federal action and arbitration.
On appeal to the First Department, Denson argued that the NDA was so broad and over-inclusive that it barred virtually any negative statement about the campaign, or those connected to Trump, and was therefore void against public policy.
After finding that statements made in court proceedings could not form the basis for an NDA violation, the panel further determined that the other statements Denson made online should likewise not have been considered, since they were made after the arbitration demand was filed.
"Since the award takes into account events occurring after the demand, which could not have been legitimately considered at arbitration, the award was made in excess of the arbitrator's enumerated authority," the panel said.
Patrick McPartland, of counsel to LaRocca Hornik Rosen & Greenberg, did not return a call seeking comment.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllEuropean, US Litigation Funding Experts Look for Commonalities at NYU Event
Law Firms Mentioned
Trending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250