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Employer did not show electronic signature on arbitration pact was valid

Employer did not show electronic signature on arbitration pact was valid
Source: Adjunct Law Prof Blog; http://lawprofessors.typepad.com/adjunctprofs/
Reproduced with permission. Copyright © 2009, Mitchell H. Rubinstein, Esq., Adjunct Professor of Law, St. Johns Law School and New York Law School, All rights reserved.

Kerr v Dillard Store Services, Inc, ___F.Supp. 2d___(D. Kans. February 17, 2009), is an important decision.

The court held that the employer failed to satisfy its burden of showing that an employee's electronic "signature" on an online arbitration agreement was valid, thus, the court refused to compel the employee to arbitrate her race discrimination claim.

The store required employees to consent to arbitration by executing electronic arbitration agreements through an intranet computer system. Significantly, however, the employee had, for months, vocally opposed and refused to sign the arbitration agreement. Where, as here, the existence of a valid and enforceable arbitration agreement is in dispute, the employer must demonstrate by a preponderance of the evidence that the employee knowingly and intentionally executed an agreement. The employer could not do so in this case.

"The problem with the [employer's] position is that it did not have adequate procedures to maintain the security of intranet passwords, to restrict authorized access to the screen which permitted electronic execution of the arbitration agreement, to determine whether electronic signatures were genuine or to determine who opened individual emails."

I am sure that we are going to see more and more cases involving the validity of electronic signatures.

Mitchell H. Rubinstein

NYPPL Comments: In another "e-mail signing" case, Williamson v Delsener, 2009 NY Slip Op 01333, decided February 24, 2009, Appellate Division, First Department [summarized by NYPPL at http://publicpersonnellaw.blogspot.com/2009/02/another-aspect-of-emerging-law-of-e.html ], the Appellate Division held that ?the e-mails exchanged between counsel, which contained their printed names at the end, constitute signed writings within the meaning of the statute of frauds" and thus "the plaintiffs were entitled to judgment and the e-mailed agreement to settle at 60% of the amount demanded was sufficiently clear and concrete to constitute an enforceable contract."

Full post as published by New York Public Personnel Law on March 05, 2009 (boomark / email).