Ft. Worth Court Rejects Arbitration Agreement

Originally published by Thomas J. Crane.

Many employers have started posting their employee polices online, and not in hard copy format. If so, they will run into the issue presented in Doe v. Columbia North Hills Hospital, 2017 WL 1089694 (Tex.App. Ft. Worth 3/23/2017). Jane Doe was sexually assaulted by a male co-worker. When she sued her former employer, it invoked an arbitration agreement to which she ostensibly agreed. But, Columbia Hospital did not issue a paper copy of the employee manual. It did not ask for physical, paper copy signatures of employees acknowledging receipt of the policies. Instead, it posted the policies online and told employees they must review the policies. The review was part of the Hospital’s orientation. It required the employee to acknowledge she had received “orientation” on problem solving and grievance procedures. But, nothing in the paper specifically mentioned arbitration.

The employer invoked arbitration. The employer won at arbitration. The employee then challenged the alleged arbitration agreement. The Ft. Worth Court of Appeals rightly noted that basic contract principles require that a party to an agreement understand the agreement. A person drafting the agreement, for example, cannot include a provision in the agreement that has type face so small that the other party cannot read it. The court found that the online positing of an arbitration agreement did not provide notice to the employee. The word “arbitration” was never used in any warning to employees asking them to review the online policies. The statement about “problem solving” and “grievance procedures” said nothing about arbitration. The court added that even if the Hospital had specifically pointed to an arbitration policy and said be sure to review it, that might not impose a duty on the part of the employee to read the arbitration policy – unless the employer specified the term of the arbitration agreement. Other courts reviewing online postings have reached a similar result.

The court noted a recent Supreme Court of Alabama decision that found an employee who could have accessed an online agreement was different than a person who actually did access an online agreement. Ms. Doe did not dispute she was warned to review the online policy about grievances. Instead, she claimed the Hospital never mentioned the arbitration policy and she never read the policy. See the decision here.

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