Thursday, July 27, 2023

6th Circuit opinion guts the validity of e-signatures on employment documents

"I never saw that agreement and I never signed it." That's all that Andrew Bazemore said under oath in defense of Papa John's claim that he was required to arbitrate his FLSA claim relating to an under-reimbursement of vehicle expenses.

The 6th Circuit held that Bazemore's otherwise unsupported declaration was enough to create an issue of fact as to the arbitrability of his claim. 

In support of its claim that Bazemore "signed" the arbitration agreement at the outset of his employment, Papa John's relied upon a declaration from its Senior Director of People Services, who said that Papa John's requires all new employees to sign an arbitration agreement as a condition of employment and that Bazemore had signed the agreement electronically through a program called e-Forms. That program requires a multi-step process for signing documents to ensure signatures are valid: the user 1.) signs in using a unique user ID and password; 2.) scrolls through the entire agreement; and 3.) and checks a box to sign. Papa John's records showed that Bazemore followed that exact process to sign its arbitration agreement on his first day of employment.

Bazemore responded with his own declaration, swearing under penalty of perjury that he "had never seen" the arbitration agreement, that his login credentials "were clearly made up of demographic information" available from his employment application, and that he had seen his manager log in for Bazemore and other delivery drivers "to complete training materials" for them.

The 6th Circuit held that conflicting affidavits created an issue of fact for a jury as to the validity of Bazemore's signature and the enforceability of the agreement.

Even though, according to the Court, e-signatures are legally valid and can show a party's assent to an agreement, the burden rests with the party trying to enforce the agreement that the signature is bona fide and therefore valid. On that issue, according to the court, an issue of fact exists:

The parties presented conflicting evidence.… We see no reason whatever that would prevent a reasonable factfinder from believing Bazemore's testimony—which means that his testimony created a genuine issue of material fact.… Civil Rule 56 contains no requirement for magic words. On the record here, a reasonable factfinder could plainly infer that, if Bazemore had not seen the agreement, he had not signed it either. Bazemore's testimony that he never saw the agreement was therefore enough to create a genuine issue as to whether he signed it.

This opinion is devastating for employers that hope to enforce any agreements against employees, including arbitration agreements. If all it takes is for an employee to say, "I deny ever signing that agreement despite electronic evidence to the contrary," I don't know what hope employers have other than a jury trial on the issue. Are they supposed to video record every instance of an employee signing an agreement to eliminate any doubt? The Bazemore court sure seem to think so.