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The United States ("US') Federal Arbitration Act ("FAA") (9 USCS § 2) requires that an agreement to arbitrate must be in writing.  Additionally, the US Electronic Signatures in Global and National Commerce Act ("E-sing Act") confers legal validity to electronic signatures in the US.  Thus, the issue is whether an e-mail agreement to arbitrate (a document that may be seen as less formal than a traditional written agreement) is enforceable under the FAA written requirement; especially when it relates to sensitive federal statutory claims like claims under the American with Disability Act ("ADA").   This article explores this issue under a ruling from the First Circuit Court of Appeals.

US courts agree with the premise that arbitration is a matter of contract.  Therefore, regular contract principles apply to the agreement between parties to submit their commercial disputes to arbitration proceedings.  Likewise, contract disputes regarding validity, revocability, and enforceability are governed by the state law applicable to the contract (commonly, the state law selected by the parties to the contract).  Once parties formally agree to submit their differences to arbitration, there is no legal waiver of the parties' assent.   Yet, it most be noted that there are certain federal statutory claims that may not be subject to arbitration. For instance, some claims arising under the federal discrimination statute may not be subject to arbitration.   There is no clear-cut rule on what federal claims are excluded from arbitration; analysis is required in a case-by-case basis. 

The US Electronic Signatures in Global and National Commerce Act ("E-sing Act") (15 U.S.C.S. §§ 7001-7031), prohibits any interpretation of a 'written provision' as to deny validity to e-signatures.  In the US, e-signatures are valid as any other hand-written signature incorporated in a paper document. Now, how the arbitration and e-sign provisions may may be interpreted in disputes arising out of sensitive federal statutory claims?  

Campbell v. Gen. Dynamics Gov't Sys. Corp (407 F.3d 546, 1st Cir., 2005) is a fine example on how the US courts have answered the above question.  Even though this case was decided by the Court of Appeals for the First Circuit, other circuits have used the court analysis in Campbell and either followed or distinguished it depending on the federal claim involved.

The issue in Campbell was whether a mandatory arbitration agreement incorporated in a dispute resolution policy sent via massive e-mail to all employees was valid for claims under the American with Disability Act ("ADA"). 

Campbell, the plaintiff, was a full-time employee at Gen. Dynamics Gov't Sys, the defendant.  One year after the plaintiff started working for the defendant, the defendant sent an e-mail to all company's employee announcing a change on the company's dispute resolution policy.  The e-mail was titled: "XXXX-- New Dispute Resolution Policy" (XXX stands for the company's president's name).  The document was also posted in the company's network accessible by all employees and required disputes between the company and the employees to be submitted to a qualified and independent arbitrator.  Yet, the e-mail did not make clear whether 'all' employer/employee disputes where subject to arbitration, including the 'workplace disputes.'  The e-mail also noted that the arbitration policy was to enter in force the following day to its transmission.  Employees were prompted to contact the president of the company or the human resources department after carefully reviewing the police sent by this company's e-mail.   The e-mail did not require the recipient employees to acknowledge its receipt and the document containing the new arbitration policy was enclosed as an attachment. 

One year after this e-mail was sent the company terminated the plaintiff for tardiness and lateness.    The plaintiff sued the company and alleged discrimination on the basis of disability.  Plaintiff claimed he suffered 'sleep apnea' and that the company should have provided accommodations to his condition.  The defendant company asserted as affirmative defense that the court could not entertain the case because according to the company's policy it was subject to arbitration.  The plaintiff moved to strike defendant's affirmative defense in two grounds: first, it claimed the e-mail did not satisfy the written provision of FAA; and second, that the company's policy was not enforceable because the e-mail containing this new policy did not provide adequate notice to make it binding. 

The First Circuit court concentrated its analysis on the issue of whether the company's was enforceable under ADA; concretely, whether the company provided minimal sufficient notice to the employee given the contractual nature of this policy. 

The court held that "The appropriateness of enforcing an agreement to arbitrate an Americans with Disabilities Act claim hinges on whether, under the totality of the circumstances, the employer's communications 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."  In this case, the court considered that the defendant company did not provide minimal sufficient notice to a reasonable prudent employee.  The court reasoned that the e-mail did not require response from the employee but merely requested recipients to review the material enclosed; this could not convey contractually binding terms of employment.

As to the level of notification required for arbitration policies to have contractual binding terms, the court held: "[i]n many cases, an employer will be able to satisfy this relatively light burden by producing evidence demonstrating that the employee had actual notice of the agreement. The question of whether, under the totality of the circumstances, the employer's communication would have provided a reasonably prudent employee notice of the waiver is an objective standard. Factors relevant to the analysis include, but are not limited to, the method of communication, the workplace context, and the content of the communication."

Thus in this particular case, an arbitration clause communicated through a massive e-mail that was to enter in force the following day to its transmission, and requesting no additional action from the employee is not enforceable under ADA claims.  Though, the court did leave open the possibility that an e-mail may constitute proper notification of binding arbitration contractual policies when appropriate notice is provided.    
 

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