Employers seeking to require binding arbitration for employee claims need to take notice of a recent decision. In Jin v. Parsons Corp., 2019 WL 356902 (D.D.C. Jan. 29, 2019) a federal judge in D.C. held that an arbitration agreement sent via email by an employer, with a notice that continued employment would constitute assent, was not sufficient to bind an employee because the employee did not actually sign the agreement or show an intent to be bound by the agreement. The employer argued that in continuing employment, the employee had implicitly agreed to the arbitration agreement. The Court rejected that argument.
Unlike the New Jersey decision in our recent blog post finding that an employee agreed to an arbitration agreement by clicking a hyperlink, here the Court focused on the fact that the employee took no affirmative action to indicate that he was even aware of the arbitration agreement, let alone that he intended to be bound by its terms. The D.C. Court rested its decision on fundamental contract law principles – an agreement is enforceable only if both parties have the distinct intention to be bound. Generally, this requires that the employee “do something” to indicate that he or she intends to enter into an agreement. Merely continuing employment was not sufficient evidence of such intent where the employer could not prove that the employee knew that his agreement to arbitrate was a condition of employment. The Court considered whether the employee’s failure to sign the agreement, after repeated notice that his continued employment would constitute acceptance, was in fact acceptance or repeated refusal of acceptance. Ultimately the Court held that, without more, acceptance simply could not be imputed to the employee.
This decision is consistent with other rulings in recent years, such as Cortez v. Doty Bros. Equip. Co., 15 Cal. App. 5th 1 (2017), where a California judge required extrinsic evidence establishing a party’s intent to arbitrate class claims, and held that silence on the issue could not be construed as assent to class arbitration. And in Skuse v. Pfizer, Inc., 2019 WL 237301 (N.J. Super. Ct. App. Div. 2019), where a New Jersey state court held that an arbitration clause “acknowledged” by employees in a training module did not equate to explicit and affirmative assent, that would create a binding agreement between parties.
In light of these cases, employers should continually examine their arbitration agreements and on-boarding practices to ensure that employees have manifested a clear intention to be bound by their terms. The Hogan Lovells employment team has extensive experience drafting and advising on arbitration agreements, and is prepared to assist with any questions or concerns. For more information about the above, or any other legal issues in the workplace, contact the authors of this article or the Hogan Lovells lawyer with whom you work.