Labor Relations and Employment Law
Representing Management Since 1962
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June 07, 2005 RE: When Is Your E-mail a Contract? by Anne Birgel and Peter Bennett
Approximately one year into the Plaintiff’s full-time employment, General Dynamics created a new dispute resolution policy providing for mandatory and binding arbitration in all employment related disputes. The policy was communicated to its employees via mass e-mail. In order for an employee to glean any of the specific workings of the Policy, the e-mail correspondence required clicking on two separate hyperlinks within the correspondence. The first link would take an inquisitive employee to a brochure detailing how the Policy worked. The second page of this brochure confirmed that employees who showed up for work the following day would be contractually bound by the arbitration agreement. The second link listed in the e-mail provided access to a dispute resolution handbook containing a complete text of the Policy. While the correspondence provided General Dynamics with evidence of receipt, it did not require any response acknowledging receipt of the Policy or that the employee had actually read and understood its terms. Approximately a year and a half later, General Dynamics terminated the Plaintiff. He sued, claiming disability discrimination. When General Dynamics moved to compel arbitration, the Plaintiff objected on the grounds that an e-mail communication is not a “written provision” as required by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and, that the company’s specific e-mail had failed to provide the Plaintiff with adequate notice that the new Policy was intended to form a binding arbitration agreement. An agreement to arbitrate is appropriate, the Court reasoned, if under the totality of circumstances, the employer’s communication to its employees “afforded some minimal level of notice sufficient to apprise those employees that continued employment would effect a waiver of the right to pursue the claim in a judicial forum.” This objective standard, the Court held, should be relatively easy for an employer to meet and should include an analysis of factors such as the method of communication, the workplace context, and the content of the communication. The Court specifically found that an “e-mail, properly couched, can be an appropriate medium for forming an arbitration agreement.” The Court went on to state that “we easily can envision circumstances in which a straightforward e-mail explicitly delineating an arbitration agreement, would be appropriate”, especially in light of the Electronic Signatures in Global and National Commerce Act (E-Sign Act, 15 U.S.C. §§7001-7031). The Court then considered the specifics of the communication by
General Dynamics to its employees. The Court found that e-mail was
not the method of communication historically usually used in handling
personnel matters. Any significant change to the employment relationship
had been traditionally memorialized in writing, included the employee’s
signature and was added to the employee’s personnel file. Further,
the Court found that General Dynamics has chosen a “no response
required” format to its communication. This meant that the communication
contained no explicit method for an employee to acknowledge either
understanding or acceptance of the Policy. The Court found that
this format actually disguised the importance of the communication.
Finally, the Court found that the wording of the e-mail itself was
vague, did not include any indication that the Policy effected a
waiver of an employee’s right to access to a judicial forum and
in fact, did not communicate enough to put the recipient on inquiry
notice even of that possibility. “To be blunt, the e-mail announcement
undersold the significance of the Policy and omitted the critical
fact that it contained a mandatory arbitration agreement.” These
findings were fatal to General Dynamics |