Texas law favors the resolution of disputes using alternative dispute resolution mechanisms such as arbitration.  To compel an employee’s claim to arbitration, the employer need only show that a valid agreement to arbitrate exists and the claims asserted by the employee fall within the scope of the agreement.  Many companies utilize technology such as online applications and electronic new hire paperwork to make the process of hiring and onboarding employees faster and easier.  A recent case from the Fort Worth Court of Appeals exemplifies the challenges an employer may face when it uses on-line or electronic acknowledgments to show that an employee entered an important agreement like an arbitration agreement.

In Doe v. Columbia North Hills Hospital, following an unfavorable arbitration award, an employee of hospital (Doe) sought to vacate the arbitration award on the grounds that no valid arbitration agreement existed because she was never aware of and never accepted the agreement.  Columbia hired Doe in 2012.  She participated in the new employee orientation where she was informed about the hospital’s intranet site and instructed her that she was responsible for reviewing and familiarizing herself with the policies applicable to her employment that were posted on that site.  She signed an Acknowledgement of Receipt of Policies that advised her that the hospital policies could be found and printed from the intranet site and that she would read and familiarize herself with the policies.  One of the policies Doe agreed to read and familiarize herself with was the “Problem solving/Grievance Procedures”.  That policies contained an agreement to arbitrate all disputes.  Later, Doe was sexually assaulted by an employee of a hospital affiliate and she brought claims against the hospital for the assault.  The hospital moved to compel arbitration which was granted by the trial court.  After an arbitration award that was unfavorable to Doe, she sought to vacate the award on the grounds that she never signed or entered an enforceable arbitration agreement.

On appeal, Doe argued that there was no evidence that she entered the arbitration agreement.  She argued that she had no notice of the Arbitration Policy; she never signed the policy; the policy was never discussed during her orientation and her written, signed acknowledgments did not evidence her notice of the arbitration policy.  Conversely, the Columbia argued that its posting on the policy on the intranet site; informing Doe of the intranet site; her acknowledgment that she could access the policies on the intranet site and her awareness that she was responsible for reviewing and familiarizing herself with the policies and that she received orientation on Problem solving/Grievance procedures was sufficient to place Doe on notice of the arbitration policies.  The Court rejected Columbia’s contentions and concluded that all of those circumstances failed to show that Doe was expressly notified of the Arbitration Policy.  Moreover, the Court further found that there was no implied notice of the policy.  Because the Court found no arbitration agreement existed, it remanded the case to the trial court for a proceeding in Court.

Employers utilizing electronic agreements, intranet sites for publication of policies and click through agreements to show employee acceptance of terms and conditions should review this opinion carefully and analyze their practices to ensure that employees have clear notice of any important terms and conditions of employment.  A key takeaway from the Columbia case is that there is often times no substitute for an employee’s actual signature on important documents like arbitration agreements and noncompetition agreements.  There is usually little difficulty in providing that the employee signed the agreement that bears the employee’s actual signature.  Problems of proof can arise when the employer uses online acknowledgements or click through agreements to show an employee entered a particular agreement or accepted certain terms.

H/t to Matt Stayton for forwarding me this case.

You can download Doe v. Columbia North Hills Hosphere.