Donald Trump Fights to Keep Arbitration Win Against Former Campaign Staffer

U.S. President Donald Trump - October 11, 2018- Getty-H 2019
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On Tuesday, President Donald Trump reacted to the sight of a former aide making the rounds on cable news.

"A low level staffer that I hardly knew named Cliff Sims wrote yet another boring book based on made up stories and fiction," he tweeted. "He pretended to be an insider when in fact he was nothing more than a gofer. He signed a non-disclosure agreement. He is a mess!"

Michael Glassner, the chief operating officer for Trump's presidential campaign, then followed up with word that a lawsuit was being prepared over Sims' alleged breach of the NDA. That immediately earned heckles in some quarters with doubts raised that a judge would ever find such a nondisclosure agreement with a government worker to be enforceable.

But observers don't have to wait on a potential case between Trump and Sims to find out whether Trump's favored method of hushing up his campaign staffers is a valid one. In fact, a coming decision by a New York judge will address this very topic.

The former staffer involved is not Omarosa Manigault-Newman, who also was threatened with a Trump legal claim over her tell-all book, but rather a woman named Jessica Denson.

Denson alleges she was subjected to sexual discrimination and harassment, and last March, she filed lawsuits — one in federal court and another in state court — against Donald J. Trump for President. She did so without the aide of a lawyer. Typically, these sort of pro se filings wouldn't be viewed as too much of a threat, but in this instance, the Trump campaign went ahead and filed an arbitration demand against her. Trump made a $1.5 million claim against her for allegedly breaching confidentiality and non-disparagement obligations by publishing certain information in connection with the lawsuit she filed.

Subsequently, a federal judge held that her arguments about the enforceability of her agreement had to be put first to an arbitrator, while a state judge in New York ruled differently, concluding, “[T]here is simply no way to construe this arbitration clause in this agreement to prevent plaintiff from pursing harassment claims in court."

What did Trump do? Well, he elected to continue arbitration without Denson's participation.

According to records, an AAA arbitrator then ruled in favor of Trump, and while the president didn't get the $1.5 million he wanted, he did get the victory.

"I find that the Agreement is valid and enforceable," wrote L. Paul Kehoe, the arbitrator. "I find that [Denson] has breached the Agreement by disclosing, disseminating and publishing confidential information in the Federal Action, and by making disparaging statements about [Trump] and the Agreement on the Internet on her GoFundMe page and on her Twitter account."

Trump was awarded $59,507.64, though the arbitrator refused to order Denson to disgorge money received as part of her GoFundMe campaign.

But that's not the end of the case because Denson, now represented by attorneys David Bowles and Maury Josephson, has brought a new action in New York court aimed at challenging the final arbitration award, which was handed down in December.

Denson is telling a New York judge that the arbitrator "exceeded his authority by continuing the arbitration even after the Court had ruled the subject matter of the arbitration to be non-arbitrable...and also because the Award violates public policy."

One of the points she's making is that the law forbids the type of retaliatory action that Trump made in response to a legal claim for sex discrimination.

"In this instance the public policy at issue is set forth in the legion of federal, state and local statutes that prohibit retaliation against employees for bringing or participating in proceedings to oppose unlawful workplace conduct," wrote her attorneys in a brief last week that added the GoFundMe and Twitter accounts were Denson's attempts to protect herself from that retaliation. 

"In any case, the public policy implications of this issue are immense," continues the brief. "Because arbitration is confidential, it is impossible to know how many Campaign workers might have been similarly discriminated against, and who might be afraid to bring a lawsuit due to the in terrorem effect of the Campaign’s NDAs. Indeed, it is impossible to know how many Campaign workers have already been retaliated against by the Campaign. Ultimately the Campaign fails to persuasively respond to Plaintiff’s public policy arguments, and this Award should be vacated for this reason as well."

The Trump campaign is both attempting to confirm the arbitration award before the federal judge as well as fighting Denson's attempt at vacatur in New York Supreme Court. Trump's lawyers continue to insist there is no authority for the assertion that employment-related claims obviate confidentiality and non-disparagement obligations and to the extent she wants to raise issues about the enforceability of the agreement, they say that Denson needs to do so before Kehoe in arbitration.

A hearing on this matter should happen soon.