Karzon v. AT&T, Inc. : Electronic Review of an Arbitration Agreement Can Mean Missouri Human Rights Act Claims Must Be Arbitrated

On January 7, 2014, Judge Carol Jackson granted AT&T’s motion to compel arbitration based on its argument that the employee failed to opt out of its Management Arbitration Agreement linked to an email sent out in 2011.  http://hr.cch.com/ELD/KarzonAT&T.pdf.   Mr. Karzon had received an e-mail on December 1, 2011, stating that Mr. Karzon’s review of the e-mail was required, and that he had the decision to participate in the arbitration program or opt out by February 6, 2012.  The e-mail further advised that failure to opt out meant that Mr. Karzon consented to the arbitration agreement.  Employees were told that there were no adverse consequences to opting out of the arbitration agreement.  AT&T’s records showed that Mr. Karzon logged into the web page to view the arbitration agreement.

Thereafter, Mr. Karzon filed suit under the Missouri Human Rights Act (MHRA), and AT&T moved to compel arbitration.  Mr. Karzon objected, arguing that the e-mail was not a written document, but Judge Jackson disagreed.  Judge Jackson found that Mr. Karzon received the e-mail and reviewed the arbitration agreement, and that the agreement to arbitration was mutual inasmuch as AT&T promised to submit its defenses to arbitration as well.  Judge Jackson further found that the Federal Arbitration Act controlled the case, and thus the Missouri disclaimer language (which requires arbitration agreements to contain language stating “THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES” was not required.

Karzon is an interesting test case for using arbitration agreements for larger workforces and disseminating them via electronic means.  We will see how the case holds up with the Eighth Circuit Court of Appeals, assuming it finds its way there.  The labor and employment lawyers at McMahon Berger are available to work with you regarding the usage of arbitration agreements, and enforcing those agreements when litigation comes.