Arbitration Clause Enforced, Despite Plaintiff’s Argument That She Neither Saw Nor Signed It

In Thomas v. Public Storage Inc., 12-cv-8804, 957 F. Supp. 2d 496 (SDNY July 31, 2013), the Southern District of New York held that where an employee received notice of an employer’s arbitration policy at the beginning of her employment and continued to work there, the arbitration clause may be enforced – notwithstanding the employee’s argument that she neither saw nor signed it.

There, the court granted defendants’ motion to compel arbitration under the Federal Arbitration Act (FAA) and dismissed plaintiff’s sex discrimination and retaliation claims.

Defendant argued that all new hires were required to complete a series of “on-boarding” documents, including an arbitration agreement which plaintiff digitally signed when she began her employment.  That agreement required employees to

submit to final and binding arbitration, and not to any other forum, any claims by Employee or [PSCC] under state, federal or local law which arises out of or relates to Employee’s employment with [PSCC], including without limitation claims for sexual harassment, discrimination, wrongful termination[.]

Plaintiff did not challenge the arbitration agreement’s legal sufficiency or the FAA’s applicability, nor that the arbitration agreement encompassed her claims.  Rather, she argued that it should not be enforced because she never signed or even saw it. Defendants, however, pointed to the fact that plaintiff signed an offer letter which mentioned the arbitration agreement and acknowledged receiving the company handbook, which includes a mandatory arbitration provision.

The court agreed that it was irrelevant that plaintiff did not sign the agreement:

In determining whether parties have agreed to arbitrate, courts apply generally accepted principles of contract law. Once a court is satisfied that an arbitration agreement is valid and the claim before it is arbitrable, it must stay or dismiss further judicial proceedings and order the parties to arbitrate.

The only disputed issue in this action is whether Plaintiff agreed to arbitrate pursuant to the Agreement. While Defendants argue that Plaintiff’s agreement is clear because she digitally signed the Agreement, Plaintiff’s proffers that she neither saw nor signed the Agreement, and her allegation that her manager must have completed the “on-boarding” process on her behalf are sufficient to raise a genuine factual dispute as to whether she did, in fact, sign the Agreement. Plaintiff’s signature, however, is not necessary to establish her assent to Defendants’ policy regarding the arbitration of employment-related disputes.

The FAA requires only that an arbitration agreement be in writing, not that it be signed.  Parties may be bound to unsigned, written arbitration agreements as long as the ordinary principles of contract and agency are satisfied.  A non-signatory to an arbitration agreement may be bound by the principle of assumption [which] arises where a party’s subsequent conduct indicates that it is assuming the obligation to arbitrate.

The court cited the Second Circuit’s Summary Order in Manigault v. Macy’s East LLC for the proposition that by continuing one’s employment after receiving notice of a dispute resolution program, the employee has agreed to arbitration.

That principle applied here, where there was sufficient evidence that plaintiff was on notice of the agreement.

Specifically, plaintiff did not dispute that she signed an offer letter stating that

[a]s part of the hiring process and as a condition of employment, all employees are required to sign an arbitration agreement as well as acknowledge and agree to all company policies.

Nor did plaintiff dispute that she received the company’s Handbook, which has a table of contents that expressly itemizes “Arbitration Agreement” and explicitly states, in its body, that “[a]ll employment at Public Storage is subject to and conditional upon agreeing to final and binding arbitration arising out of the employment relationship” and that “the Arbitration Agreement is contained in the acknowledgment of receipt section of this Handbook.”

This case was therefore different than one, such as the Eastern District of New York’s decision in Alvarez v. Coca Cola, in which the court declined to compel arbitration in light of plaintiff’s contention that he never received the company’s dispute resolution materials.

Finally, the court rejected plaintiff’s argument that the offer letter and handbook were insufficiently vague:

Plaintiff argues that references to arbitration in the offer letter and the employee handbook do not describe what claims are covered, what the arbitration process would be, what rules the process would follow, or what arbitration even means, and therefore provided insufficient notice that she would be giving up her right to a jury.  While the Handbook’s description of PSCC’s arbitration policy does not specify that discrimination and wrongful termination claims are subject to arbitration, referring instead generally to final and binding arbitration arising out of the employment relationship, arbitration clauses may cover statutory claims even if the clause at issue does not mention the specific statutes or statutes in general.

The court therefore compelled arbitration of plaintiff’s claims.

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