Aerotek, Inc. hires hundreds of
thousands of employees to work, globally, as contractors. To keep hiring
efficient, Aerotek worked with a software developer to build an online-only
hiring application. Aerotek uses the computerized hiring app exclusively to
guide candidates through the hiring process.
We recognize this system as “onboarding.”
The hiring app sends a welcome email
to the candidate, which email includes a hyperlink for the candidate’s use to
navigate the online account-registration page. At that point a unique user ID
and PW is created, and the candidate supplies answers to several personal security
At each subsequent log-in the
candidate must correctly enter the user ID, PW, and answer the security question.
If successfully navigated, the
hiring app presents the candidate with employment information and various
contracts to e-sign. First up is the Electronic Disclosure Agreement. By
agreeing to the terms of the EDA, the candidate consents to “be bound” by Aerotek’s
e-docs “as though . . . signed . . . in writing.” The next set of docs ask for
the candidate’s personal info. Each successful completion unlocks the ability
to continue deeper into the employment app.
Included in the docs is a Mutual
Trojuan Cornett, Michael Marshall,
and Lerone Boyd each remotely completed Aerotek’s computerized hiring app;
Jimmy Allen completed his in Aerotek’s office by going through the same
computerized online app procedure. Aerotek hired all four to work on a
construction project for Aerotek’s client. All four were terminated not long
after starting work; all four sued Aerotek and others for racial discrimination
Aerotek moved to compel arbitration,
which dispute resolution mechanism was contained in the MAA. All four employees
opposed the motion. Each submitted a sworn declaration acknowledging that he
had completed the online hiring application but denying that he had ever seen,
signed, or been presented with Mutual Arbitration Agreement.
Aerotek responded with a
time-stamped MAA and EDA, along with database records showing the timestamp for
every other action taken by each of the four employees in completing the hiring
At trial, Aerotek’s program manager testified
that no employee could have completed the procedure without executing the MAA,
and that the records could not have been altered or manipulated after
submission. The four employees, unmoved by the program manager’s testimony,
countered with their declarations.
Based on the evidence presented, the
trial court denied Aerotek’s motion to compel arbitration. The court of appeals
Aerotek appealed to the Supreme
To compel arbitration, a party must
prove that a valid arbitration agreement exists. For the MAAs to be valid, the employees
must have consented to them. The employees argue they did not consent to the MAAs
because the e-signatures are not theirs.
Texas law provides that if parties
to a transaction have agreed to conduct it by electronic means, then a standard
for attributing e-signatures is applied. That standard requires the showing of
a security procedure to determine if the e-record or e-signature is valid. Adequate
security procedures include the use of algorithms or other codes, identifying
words or numbers, encryption, or callback procedures.
A record that cannot be created or
changed without unique, secret credentials, can be attributed to the one person
who holds those credentials.
The Supremes sifted through the
evidence and came to a different conclusion, finding that each of the employees
signed and therefore consented to the MAAs and as a consequence, each agreed to
arbitration. Aerotek wins. See Aerotek, Inc. v. Lerone Boyd, Michael
Marshall, Jimmy Allen, and Trojuan Cornett; Case No. 20-0290; Texas Supreme
Court; May 28, 2021: https://law.justia.com/cases/texas/supreme-court/2021/20-0290-0.html.
Lessons / Questions
My surmise is that the use of e-contracts already exceeds the use of paper
contracts. This case is a great tutorial on how to be sure e-contracts are
valid, and also how to challenge e-contracts.
This case comes to us from the world of employment law. However, it seems
to have equal application to all areas of law including mine – real estate.
Do you use software to create e-contracts? Do you have a contract with the
software supplier certifying that the supplier’s products comport with law,
so you have recourse if your e-contracts are successfully challenged?
Stuart A. Lautin, Esq.*
* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York
Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.