Zhang v. UnitedHealth Group

Background

Yufan Zhang was employed by UnitedHealth Group from December 2014 through November 14, 2016. He asserted claims under the federal Age Discrimination in Employment Act and the Minnesota Human Rights Act, as well as a defamation claim, against UnitedHealth Group and Sujatha Duraimanickam.

In February 2019, the court granted the defendants’ motion to compel arbitration and stayed the case while the arbitration proceeded. Zhang was represented by counsel during the arbitration. Former Magistrate Judge Jeffrey Keyes served as the arbitrator and heard four days of evidence. On October 5, 2020, the arbitrator ruled for the defendants on all claims.

The arbitrator found that Zhang had not proved age discrimination caused his termination. The arbitrator also found that the alleged defamatory statements in Zhang’s performance reviews were protected by a qualified privilege, meaning they generally could not support liability without proof of actual malice. The arbitrator concluded that Zhang had not shown actual malice or an improper motive.

Motion to Vacate

Zhang, then representing himself, moved to vacate the arbitration award under the Federal Arbitration Act. He argued that the award was obtained through fraud because Duraimanickam and other witnesses allegedly lied, and because the defendants did not produce records from three project-management databases. He also argued that the arbitrator committed misconduct by failing to consider evidence and by failing to postpone the hearing so that additional documents could be obtained.

The defendants argued that Zhang had not shown intentional deception or other improper conduct. They noted that he knew which documents had been requested and produced, did not identify missing documents before the hearing, and did not ask the arbitrator for assistance in obtaining additional materials.

Court’s Analysis

The Federal Arbitration Act permits a court to vacate an arbitration award on limited grounds, including fraud, evident partiality or corruption, certain forms of arbitrator misconduct, or an arbitrator’s exceeding the authority granted by the parties. Review is highly deferential; a court generally will not disturb an award when the arbitrator was arguably interpreting the parties’ agreement and acted within the arbitrator’s authority.

The court held that Zhang had not proved fraud by clear and convincing evidence. His assertions that witnesses lied were general and unsupported. The court also noted that Zhang had not taken steps before the hearing to obtain the allegedly missing documents. The arbitrator found Duraimanickam’s testimony credible and found evidence of problems with Zhang’s job performance.

The court rejected Zhang’s argument that the arbitrator failed to consider his compilation of notes. The arbitration decision expressly discussed the notes but found them unreliable because it was unclear when Zhang created the compilation and he did not provide the original documents on which it was based.

The court also found no misconduct in the arbitrator’s failure to postpone the hearing. Zhang had not shown that he requested a postponement to obtain additional documents or raised the issue during the arbitration. The court stated that failing to raise alleged errors during the proceeding generally waives those objections.

Finally, the court rejected Zhang’s argument that the arbitrator improperly applied the law of qualified privilege. The court explained that an alleged legal error, described as disregard of the law, was not an available basis for vacating an award under the Federal Arbitration Act’s enumerated grounds.

Disposition

Judge Michael J. Davis ordered that Zhang’s motion to vacate the arbitration award was DENIED. The court further ordered that the matter was dismissed with prejudice and directed that judgment be entered.