If you want to arbitrate employment disputes, get a hand-signed arbitration agreement from your employee. That’s the lesson to be learned from an opinion issued by Judge David Proctor last week. Allen v. PJ Cheese, Inc., No. 2:20-CV-1846-RDP, 2022 WL 16972494 (N.D. Ala. Nov. 16, 2022).
I really don’t like arbitration of employment disputes. When I first started practicing law, arbitration was advertised as a cheaper, faster way to get a decision from an experienced decision-maker. Most attorneys now agree that employment arbitration is neither cheaper nor faster than litigation. And, employment arbitrators tend to “split the baby” attempting to make everyone happy.
Nevertheless, I have some clients who want to arbitrate their employment disputes. And, in this age of pervasive technology, they frequently obtain their arbitration agreements through online applications and the use of “electronic signatures.” Allen demonstrates one weakness with that process.
Mr. Allen sued his employer, PJ Cheese, for race discrimination. PJ Cheese filed a motion for summary judgment asking Judge Proctor to dismiss the case because Mr. Allen signed an arbitration agreement. PJ Cheese relied upon its electronic application process, which required e-signatures on a variety of documents, including an arbitration agreement. Mr. Allen admitted that he e-signed documents “relating to taxes and wages,” but “unequivocally disputed” that he ever e-signed an arbitration agreement. PJ Cheese admitted that none of its representatives saw Mr. Allen sign the agreement and could not “definitively say who was the individual who applied this electronic signature to this document.”
Faced with conflicting evidence, Judge Proctor was required to deny the motion for summary judgment. Instead, he set the case for trial — presumably on the issue of whether Mr. Allen e-signed the agreement. At trial, a jury will determine whether Mr. Allen is telling the truth when he denies e-signing the arbitration agreement.
Allen teaches that a hand-signed arbitration agreement is better than an e-signature. But, even a hand-signed agreement is not foolproof. The party opposing arbitration can still argue that a hand-signed document is forged. See Ex parte Meadows,782 So.2d 277 (Ala. 2000). Still, a hand signature is the best way to avoid the trial required by Allen.