?Takeaway: When having an employee sign an arbitration agreement, a company should obtain convincing proof of the authenticity of the signature. If the agreement is signed electronically from a work computer, the employee may claim it was signed by a company representative.
?Starting in 2015, the plaintiff worked at a Chili’s chain restaurant in Liverpool, N.Y. When she started, the restaurant was operated by Pepper Dining Inc., but shortly thereafter was purchased by Brinker International Payroll Company LP. Once Brinker took over, Chili’s employees were required to sign new employment documents, including an arbitration agreement. In January 2019, the plaintiff’s employment with Brinker ended.
The plaintiff sued Brinker, alleging that she and a class of similarly situated workers had experienced a variety of employment law violations under the Fair Labor Standards Act and state laws. Her lawsuit was joined by another plaintiff who began working at the same restaurant in 2017.
Brinker responded by moving to dismiss the lawsuit and compel arbitration under the Federal Arbitration Act. Its evidence was a set of arbitration agreements and other related documents, each of which purportedly bore the plaintiff’s electronic signature. The IP address of the electronic signatures traced back to a computer owned by Brinker, suggesting that the arbitration agreement and related documents were executed at the restaurant where the plaintiff worked.
Brinker also provided a declaration of the manager who assisted in overseeing and maintaining the company’s online employee onboarding system. The software required a first-time user to log in with a temporary password comprised of work location state, birth month, birth year and the last four digits of the user’s Social Security number. After this first login, the user would create and use a new, unique password. The user could then use the software platform to review and sign any number of electronic forms. Each time a user wanted to electronically sign a form, the user would be required to retype the unique password.
The general manager of the restaurant provided a declaration stating that all employees went through Brinker’s onboarding process and that he never completed any onboarding documents for the plaintiff or any other employee and never instructed any other manager to do so. He stated that, if he had, it would have been a serious violation of company policy for which he could be fired.
An assistant manager provided a similar declaration, but, after the motion was decided, recanted and stated that Chili’s managers did complete onboarding documents for employees at the instruction of upper management. Brinker also provided a hand-signed arbitration agreement by a co-plaintiff, and the co-plaintiff admitted that his claims were arbitrable.
The plaintiff opposed Brinker’s motion to dismiss with a sworn declaration in which she adamantly and categorically denied having electronically signed any arbitration agreement. She denied ever completing any additional employment paperwork after Brinker took over, denied using any of Brinker’s computers at Chili’s for any purpose and denied owning a computer while employed at Chili’s.
The district court granted Brinker’s motion and dismissed the plaintiff’s lawsuit, finding her evidence insufficient to disprove the agreement. The plaintiff appealed to the 2nd U.S. Circuit Court of Appeals.
On appeal, the 2nd Circuit noted that it must draw all reasonable inferences in favor of the plaintiff. If there was a disputed issue of fact regarding the making of the arbitration agreement, the district court should have proceeded to a summary trial on that issue.
The 2nd Circuit found that the plaintiff’s declaration denying she signed the arbitration agreement was sufficient to create a factual dispute because it was not blatantly contradicted by evidence presented by Brinker. Rather, Brinker’s software system for electronic signature only required information that the plaintiff provided on her I-9 form, such as birth month and year, and the last four digits of her Social Security number. Because the agreement was signed onsite, it could just as easily have been signed by a Brinker manager as the plaintiff. There was no evidence that the plaintiff received a copy of the arbitration agreement after signing.
As a result, the 2nd Circuit reversed the decision of the district court and ordered a summary trial on the issue of whether the plaintiff signed the arbitration agreement.
Barrows v. Brinker Restaurant Corp., 2d Cir., No. 21-606-cv (May 31, 2022).
Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.