With the click of a mouse, you can have an enforceable arbitration agreement

Arbitration agreements between employers and employees have been used for decades to resolve employment disputes. Historically, the employer and employee would each sign the agreement to arbitrate. If the arbitration agreement was later invoked, usually there was not an issue as to whether the parties executed the agreement. It was much more likely that the parties would dispute the scope of the arbitration agreement (i.e., did the parties agree to arbitrate the claim at issue?) or whether it was unconscionable and, thus, unenforceable.    

Recently, the Sixth Circuit decided a case where the arbitration agreement was sent to the employee by e-mail and he was asked to acknowledge that he reviewed it by clicking a “review completed” button embedded in the e-mail. The employee then had a certain period of time to “opt-out” of the arbitration agreement before it became effective. The company’s records showed the employee clicked the “review completed” button on January 21, 2012 at 11:02 a.m. and never opted out.  A little over two years later, the employee was fired and filed suit in court against his former employer. The employer moved the court to compel arbitration. 

One of the first matters a court must determine in deciding whether to compel arbitration is whether the parties agreed to arbitrate. It is fundamental that in the absence of an agreement to arbitrate, a party cannot be compelled to do so.   

The employee claimed that he “never received an offer or conveyed his acceptance to be bound by an agreement” to arbitrate. Uszak v. AT &T Mobility Services LLC, 2016 U.S. App. LEXIS 13449 (6^th  Cir. July 21, 2016), *8. He argued that clicking the “review complete” button and failing to opt out does not constitute acceptance under Ohio law. Id., *11. Therefore, according to the employee, he did not agree to arbitrate his claims against his employer. He asserted that someone else may have logged in to his e-mail, whether intentionally or accidentally, and clicked the “review complete” button on his behalf.  Following an evidentiary hearing, the district court rejected this contention and the Sixth Circuit affirmed.

The Sixth Circuit thoroughly reviewed the evidence presented and noted the lack of: (1) any evidence that anyone else had the employee’s e-mail password and (2) any reason someone else would have hit the “review complete” button on the employee’s behalf “as he presented no evidence that any negative consequence would accrue if he did not accept the arbitration agreement.” Id., *9. The Sixth Circuit emphasized that employees were not required to agree to arbitrate their claims. Instead, the company made it clear that whether or not to participate was the employee’s decision to make. Id., *11.

The Sixth Circuit concluded: 

An employee who signs a form (in this case electronically), indicating that he understands his obligations if he chooses not to participate in an arbitration program, fails to take the required action to opt out, and never provides any other notice to management that he intends to opt out, has ‘demonstrated his agreement to be bound’ by an arbitration agreement. (Citations omitted.) Id., *12.         

This case illustrates the importance of documentation and a well-developed evidentiary record when trying to invoke arbitration. Also important to the outcome was the fact that there was a two-step process—review of the arbitration agreement followed by the opportunity to opt-out within approximately two weeks of hitting the “review complete” button. If your company procures arbitration agreements from employees without obtaining their signatures, following these practices may prove helpful when moving to compel arbitration.