First Circuit holds E-Mail Sufficient as a Contract Under FAA (Web)
June 7, 2005
Roderick Campbell v. General Dynamics Government Systems Corporation and Richard T. Scnorbus (May 23, 2005). The First Circuit stated that an e-mail announcement regarding a new dispute resolution policy may satisfy the writing requirement of the Federal Arbitration Act as a binding and legally enforceable agreement to arbitrate. The court relied on the Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) to announce that e-mails are sufficient to fulfill the writing requirement as set out in Section 2 of the Federal Arbitration Act. The E-Sign Act states that "a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”
The case at bar involved an employee who received an e-mail communication from the President of General Dynamics which included two attachments: a two-page brochure which explained how the new dispute resolution policy worked and the full text of the policy. There was no provision for the employee acknowledging receipt or review of the e-mail, nor did it state that the new policy changed a contractual term of employment and affected employees’ rights to bring a lawsuit against the company. Accordingly, in this case the court held that the e-mail was not enough to establish sufficient notice. The court was clear, however, to provide that an e-mail would be considered an enforceable and binding arbitration agreement in circumstances where the recipient was put on minimally sufficient notice of the contractual nature of the e-mail and the waiver of the employee’s right to access a judicial forum.
The court’s acceptance of electronic mail as a trusted form of communication for important matters such as Arbitration Agreements is just one of the effects of the growing reliance of technology in the workplace. Because of the significant nature of the agreement, the court requires that the “employer [has] provided minimally sufficient notice of the contractual nature of the e-mailed policy and of the concomitant waiver of an employee’s right to access a judicial forum.”
See this decision at: http://caselaw.lp.findlaw.com/data2/circs/1st/041828p.pdf