In Builders First Source-South Texas LP v. Ortiz, the Fourteenth Court of Appeals addressed the consequences of an arbitrator’s “fraudulent non-disclosure of information.”  The Court appears to be the first appellate court in Texas to adopt the phrase “fraudulent non-disclosure” in addressing vacatur of an arbitrator’s ruling because of the following circumstances.

An individual employed by a company that was a non-subscriber to Texas workers compensation laws signed an agreement to participate in the company’s injury benefit Plan.  The Plan contained a clause requiring arbitration of any dispute over benefits.  When the individual was later injured on-the-job and the parties could not resolve the issue of benefits, an arbitration ensued.

The American Arbitration Association presented to the parties an individual as a candidate to be appointed as arbitrator, and the candidate submitted a required sworn disclosure stating, among other things, that following a conflicts check, she had had no contact with the representatives, the law firms, or the parties in any prior arbitration proceedings, and therefore nothing to disclose.  In the absence of an objection by the parties, this Arbitrator was appointed to adjudicate the dispute.

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