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What is the Effect of Arbitration Clauses on Sexual Harassment and Other Employment Discrimination C

What about “e-signing” arbitration agreements and other employment related documents?

It seems that this is an area of the law that is constantly evolving. These days, instead of printing employee handbooks, arbitration agreements and other employment documents, many employers are providing these documents solely in electronic form, which employees acknowledge receiving by so-called electronic signatures, instead of written ones. Is this legit? It might be, as long as the company has a system for authenticating those e-signatures. If faced with litigation, the employer would have to prove in court that a signature was really executed by a particular employee or job applicant.

In a recent case in California, entitled Ruiz v. Moss Brothers Auto Group, a gentleman named Ernesto sued his employee for overtime and wages violations, among other things. The employer claimed that this claim did not belong in a court of law, but only could be brought to out-of court arbitration (no judge or jury), and that Ernesto had agreed to this by e-signing an agreement to arbitrate all employment claims by entering a user name and password, and “clicking through” all of the paperwork. Ernesto did not remember doing this, and there was no other proof that it really was him, since another person could have used his user name and password. Since there was no proof that the employee himself actually electronically signed the arbitration agreement, the California Court of Appeals refused to enforce the agreement to arbitrate all employment claims and let Ernesto keep the case in a court of law. There is no know case like this in New Jersey so far.

Why is this important? It’s because such a case is bound to occur in New Jersey in the near future and there is a big difference between having a case heard by a judge or jury in a court of law, where the rules of evidence apply and “discovery” is available, and having a dispute heard by 1 or more professional arbitrators where the ability to do discovery (written questions, document exchange and depositions) is limited, and many of the rules of evidence do not apply. Arbitration agreements also severely limit or eliminate the right to appeal the arbitrator’s decision.

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