Atlanta Employment Attorneys Blog
Modern technology has created many advantages for employers and employees. Today, an employee and an employer can enter into an agreement even with the employee situated hundreds of miles from the employer’s nearest office. Proper electronic security is one thing that employers and employees alike should keep in mind when it comes to e-signatures and online onboarding. If a dispute arises later and the employee seeks to escape parts of her contract — such as an arbitration clause — the employer needs to be equipped with clear evidence showing that the signature occurred at the time of onboarding and could only have been entered by the employee. For questions about arbitration agreements and Fair Labor Standards Act cases, talk to a knowledgeable Atlanta wage and hour lawyer with experience handling this type of dispute.
A recent subminimum wage case involving pizza delivery drivers is a good example of the issues that may be involved in electronic agreement signature matters.
The drivers, O.R. and W.S., signed on to deliver food for a major Pizza Hut franchisee. In October 2023, they filed what they hoped would become a class action lawsuit against their employer, alleging that the franchisee illegally paid them subminimum wages.
The employer, however, believed it had evidence that would stop the litigation in its tracks. The franchisee pointed to the drivers’ employment agreements, which contained arbitration clauses. These contract provisions typically state that any dispute related to an employee’s employment with that employer shall be resolved in an arbitration hearing rather than a civil trial. Employers often include them because civil litigation can be more expensive, time-consuming, unpredictable, and exposed to prying eyes than arbitration.
For employers with large numbers of employees, employees located in many different places, or both, electronic contracting may make sense. In this process, an application places an electronic “signature” (which typically consists of an electronically finger-scrawled signature or the individual’s name printed in a cursive-looking computer font) in all the necessary signature blocks within the contract. However, employers who use electronic onboarding should be careful to ensure that their processes create a clear and unequivocal employee acceptance of the agreement, including crucial terms like an arbitration clause. Without proper security, anyone who can type an employee’s name can potentially generate a “signature” using the cursive-looking computer-generated font, so employers should maintain consistent, written protocols for onboarding and security.
One driver’s claims revolved around the pizza franchisee’s use of electronic contracting. Onboarding with the franchisee required signing two agreements, and O.R. alleged that she did “not remember signing them and that her manager might have signed them on her behalf.” The crux of this argument was that someone other than the driver signed the arbitration agreement, O.R. never agreed to the agreement’s terms, and the agreement was unenforceable.
The employer defeated the driver’s “I do not recall” argument because it had compelling evidence regarding its onboarding process. The franchisee required new hires like O.R. to create a personalized login and password and enter a secure portal to sign documents. The employer also provided proof that the new hires had set up their own passwords and that the employer had no access to those passwords.
The Importance of Security and Proper Signature Protocols
The driver’s contentions alleged that a “culture of password sharing” existed within the employer’s business. This argument failed O.R. because she relied on texts from May 2023 but lacked evidence that her manager or anyone else knew her password when she signed her onboarding documents in early 2022. Nevertheless, the driver’s argument should remind employers to take all necessary steps to ensure password security. A failure to do so could open the employer to plausible arguments that the employee never signed an essential contracting document, making the document unenforceable.
Given the strength of this evidence and the comparative weakness of the driver’s proof, the court concluded that the only way the driver’s signature could appear on her documents was if she logged in and electronically signed them herself.
FLSA lawsuits often are larger actions with many smaller battles within them, any one of which may be the key to ultimate success. For an employer, part of that success may involve moving the case from a civil court to an arbitration setting. Doing so typically involves having a clear and valid arbitration agreement in place. When it comes to enforcing an arbitration clause (as an employer) or nullifying an arbitration agreement (as an employee) in a FLSA case, having skilled legal counsel is invaluable. Whether your case involves an arbitration agreement or some other FLSA issue, the Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert can help. Our team has the firsthand and in-depth experience necessary to create a successful solution for your situation. Contact us through this website or at 404-873-8048 to schedule a consultation today for the advice and advocacy you need.