September, 2021 | The Law Offices of Gregory D. Jordan

Texas Court Issues Opinion in Business Dispute Case Involving E-Signed Arbitration Agreement

Recently, a state appellate court issued an opinion in a Texas business dispute case involving one party’s claim that it never signed an arbitration agreement. The case Aerotek v. Boyd illustrates the challenges companies may face when using electronic signatures. However, the court ultimately held that an electronically signed document is valid, even in the face of the signing party’s claim they never signed the document, provided the party attempting to enforce the contract can show that the program contained sufficient security procedures.

The Facts of the Case

Aerotek is a company that hires workers for its client companies. Aerotek employs hundreds of thousands of workers across the country. To make the hiring process more efficient, it has developed an online-only hiring platform. The platform works much like any other online account; users create a username and password, answer security questions, and use their login information to complete the hiring process.

Among the documents provided to applicants is an Electronic Disclosure Agreement (EDA). When a prospective employee signs the EDA, they agree to be bound by the hiring documents, “as though they were in writing.” One of these documents is an arbitration agreement.

The plaintiffs in the case are several employees, all of whom completed the online onboarding process. Each plaintiff electronically signed the arbitration agreement; however, they all denied ever being presented with the agreement. For various reasons, the employees challenged the arbitration agreement, claiming the agreement could not legally bind them.

In support of enforcing the arbitration agreement, Aerotek presented two witnesses. One witness was a 20-year employee of Aerotek who helped the software developer come up with the online platform. She testified to the hiring process and explained that there had only been one glitch with the system that prevented applicants from responding to the emails they were sent and had nothing to do with the delivery of the arbitration agreement.

The other Aerotek witness was an administrative assistant who helped one of the plaintiffs complete the online application. She explained that she had helped hundreds of employees and, although she did not specifically recall assisting the plaintiff, she followed the same routine every time. Essentially, she would ensure that the applicant completed each form before continuing and would regularly get the applicant’s consent to continue the process.

In response, the plaintiffs presented signed affidavits that they did not receive a copy of the arbitration agreement.

The trial court denied Aerotek’s motion to compel arbitration. The trial court indicated that Aerotek needed to present the software developer to establish that the system was operational and contained the necessary security features. Aerotek appealed to the state’s high court.

The Appellate Opinion

The Texas Supreme Court began its analysis by noting that, to compel arbitration, a party must prove that the agreement exists. This requires the party attempting to compel arbitration to show that the other party consented to the contract.

The court then went on to review the lower court’s findings, which were that the employees’ actual signatures were not on the signed agreement (because they were electronically signed). The supreme court noted that it was required to credit the trial court’s finding. However, that did not end the inquiry, as if the parties agree to complete a document electronically, “an “electronic signature is attributable to a person if it was the act of the person.” The court noted that this could be shown “in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.”

Here, the court held that Aerotek’s witnesses presented sufficient testimony regarding the security features of the online hiring platform. The court explained that the witnesses’ testimony conclusively established that it would be impossible for the employees to have bypassed the arbitration agreement without signing it. Thus, the court found that the electronic signatures were attributable to the employees and reversed the lower court’s denial of Aerotek’s motion to compel arbitration.

Are You Dealing with a Texas Business Law Dispute?

When success matters, every decision you make for yourself or your business is essential. Choosing which Austin business dispute attorney to handle your case is no exception. Attorney Gregory D. Jordan has over 30 years of experience helping businesses of all types deal with the full range of legal issues they confront, including arbitration disputes, breach of contract claims, allegations of fraud, and more. Attorney Jordan can confidently help you face any problem your business is facing head-on. To learn more about how we can help your business effectively overcome its legal issues, call 512-419-0684 to schedule a consultation today.

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