Read or Not, Arbitration Agreement Emailed To Employee Deemed Enforceable

By: Peter J. Gallagher (LinkedIn)

There may come a day when the law regarding the enforceability of arbitration agreements is so well settled that courts no longer have to deal with the issue, but that day has not yet arrived. In Jasicki v. Morgan Stanley Smith Barney, LLC, the Appellate Division was once again asked to determine the enforceability of an arbitration agreement between employer and employee. Unlike many cases, however, the wording of the agreement in Jasicki was not the issue. Instead, the case turned on the manner in which the employer delivered the agreement to the employer.

In Jasicki, plaintiff was employed by defendants. She sued defendants (company and supervisor), claiming that she had been harassed by her supervisor and that the company protected the supervisor and retaliated against her after she complained about the harassment. Defendants moved to compel arbitration. The motion was based on an email that was sent by defendants’ human resources department, which announced the expansion of the company’s arbitration program and included a detailed arbitration provision. The email provided that employees could opt out of the arbitration program within 30 days of receiving the email. If they failed to do so, but continued their employment with the company, then they would be deemed to have consented and agreed to the terms of the arbitration program.

In their motion, defendants introduced evidence from their IT professional demonstrating that plaintiff received the email and that it was marked “read” in her mailbox. Plaintiff never opted out of the arbitration program, so defendants argued she was required to arbitrate.

Plaintiff countered that “the mere receipt of an email was not enough to compel her to arbitrate her claims.” She also argued that certain disclaimers in the company’s email rendered the agreement illusory and that she did not knowingly or voluntarily waive her right to a jury trial.

The trial court granted defendants’ motion and plaintiff appealed. On appeal, plaintiff argued that there was no agreement to arbitrate and that the trial court erred by relying on metadata showing that the company’s email was marked “read” to conclude that plaintiff had read the email and agreed to arbitrate.

The Appellate Division affirmed the trial court’s decision. The court noted that arbitration provisions between employers and employees will generally be enforced as long as they reflect that the employee clearly and unambiguously agreed to arbitrate. The Appellate Division observed that an employee’s signature to an arbitration agreement is the “customary and perhaps surest indication” that an employee knowingly and voluntarily waived its rights and agreed to arbitrate, but an employee’s signature was not required. Instead, the employee’s waiver could be reflected in a “properly couched” email, even one that refers to an arbitration policy contained in a separate writing, provided that the email reflects the employee’s knowing and voluntary waiver of rights in unambiguous terms.

The Appellate Division held that the email in Jasicki met this standard. It held that there was no dispute that plaintiff received the email and that the email’s subject line “unmistakably pertained” to the company’s arbitration program. That plaintiff may not have actually read the email was of no moment because, as the Appellate Division held, “an employee’s failure to review the contents of an email does not invalidate an arbitration agreement.” (In reaching this conclusion, the Appellate Division rejected plaintiff’s reliance on Skuse v. Pfizer, Inc., a case that I discussed here, which involved an employee clicking on a link to “acknowledge” receipt of an arbitration agreement.) In support of its decision, the Appellate Division also noted that arbitration was not unilaterally imposed on plaintiff – she had the ability to opt out, but chose not to. Accordingly, the Appellate Division affirmed the trial court, and rejected plaintiff’s argument that the dispute “center[ed] on metadata or that defendants were required to prove the extent to which she read the [ ] email, beyond presenting objective evidence that she received the email, in order to compel arbitration.”

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