In a case that serves as an example of how technical pitfalls can doom enforcement of a mandatory arbitration agreement, the U.S. Court of Appeals for the Eighth Circuit held recently that an employee’s “mere review” of an arbitration provision contained in an employee handbook did not constitute an acceptance to be bound to arbitration.
In Shockley v. PrimeLending, the appeals court found that as part of her onboarding, the plaintiff’s online “Acknowledgment of Review” of the company’s policies and handbook — which contained the arbitration provision — did not constitute an unequivocal acceptance on her part to arbitrate employment-related disputes with the company. There was no evidence that the plaintiff actually read the handbook.
The dispute arose after the plaintiff brought a class action in federal court alleging unpaid wages and overtime pay violations of the Fair Labor Standards Act (FLSA). The company asked the trial court to compel arbitration as outlined in the plaintiff’s Acknowledgement of Review. The trial court declined to compel arbitration, and the company appealed to the Eighth Circuit, which affirmed.
A copy of the Eighth Circuit’s decision is available online at here.
Members of the Center for Workplace Compliance (CWC) can read more here.