Thursday, April 6, 2017

Fort Worth COA Rules Employer’s Online Arbitration Policy is Unenforceable Absent Explicit Notice to Workers

Originally published by Beth Graham.

The Court of Appeals for the Second District of Texas in Fort Worth has ruled that a worker was not bound by her employer’s arbitration policy despite that it was made available to her online because she was not explicitly informed about it.  In Doe v. Columbia North Hills Hospital Subsidiary, et al., No. 02-16-00275-CV (Tex. App. – Fort Worth [2d Dist.], March 23, 2017), Columbia North Hills Hospital (the “Hospital”) implemented a mandatory binding arbitration policy related to all future disputes with employees in 2006.  Following implementation, the arbitration policy was posted on the Hospital’s intranet and available to workers at all times.

In 2012, the Hospital hired a part-time technician, Jane Doe.  During Doe’s new employee orientation, she was informed the Hospital maintained an intranet that included a copy of numerous policies related to her employment.  Doe was instructed to familiarize herself with the policies included on the intranet and signed an acknowledgement stating it was her responsibility to review the contents of the Hospital’s orientation handbook.  Doe also signed an acknowledgment stating she was aware that additional employment-related policies were available on the Hospital’s intranet.  Doe was never specifically informed about or provided with a copy of the Hospital’s mandatory arbitration policy.

A few months after Doe began working for the Hospital, she was sexually assaulted by a co-worker.  As a result, Doe filed a sexual harassment, retaliation, and negligence lawsuit against both the perpetrator of the assault and the Hospital in Tarrant County, Texas.  In response to Doe’s case, the Hospital filed a motion to compel arbitration based on the company’s mandatory arbitration policy and the acknowledgements Doe signed during her new employee orientation.  The trial court granted the Hospital’s motion with regard to Doe’s claims against her employer and the parties proceeded to arbitration.

After an arbitrator issued a decision in favor of the hospital, the trial court confirmed the award over Doe’s objections.  Doe then filed an appeal with the Court of Appeals for the Second District of Texas in Fort Worth.

On appeal, the court stated neither party disputed that Doe’s claims were covered by the mandatory arbitration policy.  Instead, Doe argued the trial court erred when it compelled her claims against the Hospital to arbitration because she was not provided with notice regarding her employer’s mandatory arbitration policy.  As a result, Doe asserted that the arbitration policy was unenforceable.

After examining the facts of the case, the Fort Worth court dismissed the Hospital’s claim that the evidence suggested Doe was impliedly provided with notice regarding her employer’s mandatory arbitration policy.  According to the court:

Importantly, notice may be implied only if the party sought to be charged with notice has a duty to make further inquiry. See Flack, 148 Tex. at 500, 226 S.W.2d at 632; Exxon Corp. v. Raetzer, 533 S.W.2d 842, 846 (Tex. Civ. App.-Corpus Christi 1976, writ ref’d n.r.e.). A duty to make further inquiry “extends only to those matters that are fairly suggested by the facts really known.” Exxon Corp., 533 S.W.2d at 847 (quoting 41 Tex. Jur. 2d, Notice, § 5 (1963)). Notice will not be implied when the circumstances may refer equally to some matter other than that with which a person is purportedly charged with having notice. Id.

None of the evidence that Appellees rely upon, considered individually or as a whole, impliedly notified Doe of the Arbitration Policy. We join the courts that have held that merely posting an arbitration policy on an intranet site is insufficient to give an employee notice. See Goad v. St. David’s Healthcare P’ship, L.P., 1-16-CV-044-RP, 2016 WL 2853573, at *3 (W.D. Tex. May 13, 2016) (reasoning similarly based on own facts); HSS Sys., L.L.C. v. Lucan, No. 03-10-00761-CV, 2011 WL 2297716, at *4 (Tex. App.-Austin June 9, 2011, no pet.) (mem. op.) (“[Appellant] does not cite to, nor could we find, any authority suggesting that the mere presence of a policy on the company intranet, without any further notification to the employee, amounted to notice of the policy.”); see also Big Bass Towing Co. v. Akin, 409 S.W.3d 835, 842 (Tex. App.-Dallas 2013, no pet.) (“The fact that a document was `available’ for inspection does not demonstrate that Akin had notice of the document . . . .”).

Appellees’ informing Doe about the intranet site and Doe’s acknowledging that she could access Appellees’ “policies” fairly suggested that Appellees’ “policies” (but not specifically the Arbitration Policy) were in electronic format and available for review by employees but not that Appellees had a binding arbitration policy. See Exxon Corp., 533 S.W.2d at 847. Further, the Supreme Court of Alabama recently distinguished between an employee who could have accessed a web page containing an arbitration agreement and an employee who actually accessed a web page containing an arbitration agreement, holding that the latter, but not the former, had sufficient notice of an arbitration agreement. See Moore-Dennis v. Franklin, 201 So.3d 1131, 1144 (Ala. 2016). Appellees submitted no summary evidence that Doe actually accessed the intranet site.

Appellees’ instructing Doe that she was responsible for familiarizing herself with Appellees’ “policies” and Doe’s acknowledging that she had received “orientation” on “Problem solving/Grievance Procedures” are closer calls but are still ultimately insufficient to demonstrate notice.

The Court of Appeals for the Second District of Texas in Fort Worth held the trial court committed error when it compelled Doe’s claims against the Hospital to arbitration before reversing and remanding the case.

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