Employee’s Electronic Signature on Arbitration Agreement Is Authentic
Monday, June 6, 2016

More and more companies are requiring employees to electronically review, sign and acknowledge a host of employment documents. Accordingly, it is important that employers understand the various factors courts look at to determine the validity of such electronic signatures. More than a decade ago, California and federal lawmakers issued legislation providing for the enforceability of electronic signatures. The relevant California statute, known as the Uniform Electronic Transactions Act, provides that an “electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which [sic] the electronic record or electronic signature was attributable.” (Cal. Civ. Code § 1633.1 et seq.)

In the recent case Espejo v. Southern California Permanente Medical Group, the California Court of Appeal, Second District, established how to meet the requirement for authenticating such an electronic signature. In its April 22, 2016, decision, the Court deemed the electronic signature on an arbitration agreement as authentic, despite the plaintiff’s claims that he had never seen that particular document and would not have signed it after only a minute’s review. The Court found that the electronic signature was the “act” of the employee because the employer had established (1) the security precautions involved in the electronic access to the document and (2) the specific steps required to sign the document electronically.

The case now serves as a guideline for the precautions and steps of the electronic-signing procedure that allow a finding of authenticity:

  • The employee receives an email containing a link to a homepage.

  • Access to that homepage requires a private, unique username and password that are provided to the employee.

  • Once the employee has logged on, he is required to create a new password; only when a new password has been created can the employee access the employment document.

  • On viewing the document’s signature page, an automatic prompt appears to “accept” the document’s terms and conditions.

  • Once the employee has chosen to “accept,” he is prompted to type in his name.

  • The employee’s typed name is stored electronically together with the date, time and IP address of the signature.


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