Contributors

Jennifer Woo Burns

Of Counsel

In the field of employment law, litigators are often in the position of reviewing a complaining employee’s new hire or “onboarding” documents to determine precisely what they and their employer agreed to when the employee began working. Included in many such documents are so-called ‘Binding Arbitration Agreements’ or similar clauses. These agreements (basically a contract between the two parties) can sometimes be more than a decade old, stored poorly, or even lost, but nonetheless have the potential to significantly impact litigation when a work situation turns sour down the road. Indeed, the agreements can wholly dictate or at least be the deciding factor between whether an employee can file an expensive and time-consuming lawsuit with the courts or be forced into private arbitration—often a much more efficient and cost-effective option for resolving the dispute for everyone involved. However, as with most contracts, the devil is in the details and no detail is too small where lawyers are concerned with arguing their client’s positions. For example, attorneys seeking to invalidate such an agreement can and do seize on something as minor as font size to argue that an arbitration agreement is “unconscionable” or completely invalid, even though the terms were perfectly valid and expressly agreed to by both parties. See Basith v. Lithia Motors, Inc. (2023) 90 Cal.App.5th 951 [307 Cal.Rptr.3d 654, 655].

To that end, especially in today’s tech savvy post-pandemic hiring process, many such agreements are done online. Employees often use an employer’s online document portal to electronically sign through a host of documents, including the binding arbitration agreement. This is of course efficient and negates the need for a manager or company president to sit down with a pen and manually sign through hundreds or even thousands of documents every time someone is hired. However, it is often the case that in reviewing such documents, attorneys see that it is only the new employee that has signed the document, while the signature line for the employer is left blank. This seemingly insignificant lapse can present an opportunity for a lawyer seeking to argue against arbitration and force the matter into court. For example, attorneys in Texas recently argued that an otherwise enforceable agreement was “not valid because Defendant [i.e., the employer] did not sign the agreement.” See Soni v. Solera Holdings, Inc. (N.D. Tex., Mar. 23, 2021, No. 3:20-CV-02925-M) 2021 WL 1726891, at *2, aff'd sub nom. Soni v. Solera Holdings, L.L.C. (5th Cir., May 4, 2022, No. 21-10428) 2022 WL 1402046. While the court in Soni looked somewhat beyond the four corners of the contract itself, it could just as easily have gone the other direction with a different court or slightly different facts and all over something as simple as a single missed signature in what presumably a whole packet of new employment documents. Such cases should impress on Employers that are either updating or creating new-hire documents the reality that each and every detail (or seemingly minor defect) in such documents can and will be exploited by an experienced litigator to fight for a desired outcome.

As such, employers should be very careful not only to keep their agreements up to date on the current state of the law and to store them properly, but also ensure that everyone—and their signatures on critical documents like a binding arbitration agreement—are completed and ‘on the same page.’