A company sent a company-wide email notifying employees about a new policy mandating arbitration of employment disputes. The subject header of the email read, "New Dispute Resolution Policy". The message contained a page long letter from the president of the company which in part listed the four step process for employee dispute resolution with the last step being arbitration. The email included a link to the policy.
The email did not mention that the employee's right to the judicial process was eliminated nor did it mention that the agreement to arbitrate would become binding by continued employment. The text of the new arbitration policy ("Policy") was not contained in the email, but was posted separately on the company's intranet.
Later, an employee filed a lawsuit in Court claiming that he was wrongfully terminated by the company because of a disability. The Court denied the employer's request that the former employee should be required to arbitrate his claim according to the new policy, and allows the lawsuit to proceed in Court.
Arbitration Agreement Requires Actual Notice
On June 3, 2004, the Federal District Court in Massachusetts decided Campbell v. General Dynamics, et. al., held that email did not provide minimally sufficient notice of the binding effect upon continued employment or of the waiver of the employee's legal rights. The court did not say that communication by e-mail as a medium for contract formation in the workplace is unacceptable. It just said that the company did not do enough to show that its employees had agreed to the arbitration policy found in the email.
The Court placed a burden on the employer to expressly; clearly and unmistakably notify employees when a policy requires employees to relinquish their rights to assert civil rights claims in Court. In these circumstances, employers are required to give employees "actual notice" in order to implement a mandatory arbitration agreement.
Actual Agreement from Employee Required
The Court observed that General Dynamics did nothing more than send the email. It did not request an affirmation from the employee that they had read the email or the Policy. In fact, the email stated that no response was required. It was not enough for the employer to demonstrate that the employee opened the email.
General Dynamics needed to show that the employee opened the email and the Policy, read them and agreed to the terms. It could have done this by requesting a response from the employee for the email and by signing an acknowledgement or clicking a box on a computer screen.
The Court noted that the email subject-header did not indicate that the message was of critical importance. Nor did the email say directly that it contained an arbitration Policy that affected the employee's right to a judicial forum.
Further, the email did not put the employee on notice of the importance of reading the Policy on the company's intranet. The Court did not find issue with the written Policy itself, just the email.
Company's Notice Insufficient
The Court stated that a reasonable employee could have read the email and decided that was being offered was an additional forum for employee dispute resolutions rather than a mandatory replacement.
Further, because the email "under-sold" the policy change, an employee would not have a clue of the mutual obligations contained the Policy. The Court said that this could have easily been corrected with a statement in the email of the kind contained in the Policy that a binding contract was being created between the Employee and the Company.
Email Acceptable if Properly Done
This case should not be interpreted to mean that email notification of changes in employment policies is never appropriate. Email notification may very well be sufficient for certain matters. For issues as significant as mandatory arbitration of employment discrimination claims, however, the employer must give actual notice and receive acceptance from the employee.