A federal court in Massachusetts has just ruled that an employer's e-mail notification to employees about a new and mandatory arbitration policy was not sufficient notice to be binding. As more and more communications are electronic, the reasoning of this particular court decision could have a fairly far-reaching impact.

In the case Campbell v. General Dynamics Government Systems Corporation ("General Dynamics"), Richard Campbell ("Campbell") brought suit alleging that he had been terminated from employment because of his handicap — sleep apnea — in violation of the Americans With Disabilities Act and Massachusetts state law. General Dynamics sought to stay the federal court proceedings and compel Campbell to arbitrate his claims, based on a Dispute Resolution Policy ("DRP") put in place by General Dynamics during the term of Campbell's employment. The court ultimately denied General Dynamics requests, after reviewing the record and considering the adequacy of the notice of the DRP to Campbell.

In beginning its analysis, the court first recognized that "there is no dispute that the DRP, if enforceable and if read in its entirety, would require Campbell to submit his claims to arbitration." Thus, "the controversy surrounding this [issue] centers on General Dynamics' attempt to inform [Campbell] of the DRP before its implementation, and on whether it succeeded in doing so."

The parties agreed that on April 30, 2001, General Dynamics sent an e-mail to all of its employees. The subject line of the e-mail contained the words "New Dispute Resolution Policy." However, of significance to the court, "nowhere in the e-mail's heading was any indication given that the email was of critical importance" or that "the e-mail was intended to change employees' legal rights."

Furthermore, "the first two paragraphs of the e-mail made no mention of the DRP, the importance of the e-mail, or anything even remotely indicating that the e-mail was to have the effect of taking away employees' rights to a federal judicial forum."

The DRP was "described in broad terms" in the third paragraph, and there only was "a vague reference to the issues it encompassed." The fifth paragraph stated that the DRP would become effective on May 1, 2001, "and only there was it first mentioned that it was 'an essential element of [employees'] employment relationship.'" The court was concerned that "no other reference — implicit or explicit — was made in the text of the message to the fact that General Dynamics expected its employees to be bound by the DRP if they continued working there."

The e-mail did include two links — one to a two-page flyer which set out the key provisions of the DRP in plain-language question-and-answer format, and the other to a 26-page handbook which detailed the provisions of the DRP. These linked documents made plain that the DRP "is the exclusive means of resolving workplace disputes for legally protected rights."

Campbell denied having a recollection of even receiving the foregoing e-mail. General Dynamics submitted evidence in the form of a tracking log purportedly showing that Campbell had in fact opened the e-mail. However, more important to the court was that General Dynamics offered "no evidence to support. .. that Campbell clicked on either link, or that he read the text of the e-mail."

The court concluded that the DRP did not satisfy the Federal Arbitration Act, which requires a "written agreement." Here, according to the court, the notice of the DRP was insufficient to conclude that Campbell had agreed to its terms. Indeed, "a waiver of the right to a judicial forum for civil rights claims for continued employment 'must at least be express.'" As further explained by the court, "under even the loosest of standards suggested by courts, an employee does not give up his statutory right to a judicial forum unless he knew he was doing so or the notice he received was sufficient to bind him despite his lack of actual knowledge" — neither of which was the case here.

The court was critical of the fact that "General Dynamics did nothing but send the e-mail to make its employees aware of the DRP." Even in the realm of e-mail technology, the court believed that General Dynamics could "do better." As the court noted, "the company did not, for example, require an employee to signify by return e-mail that he had read the e-mail, or more importantly, that he had read the attachments and understood their implications." Indeed, the company did not even have a tracking system in place that could determine whether an employee had clicked on the links to the e-mail announcing the DRP. Nor did General Dynamics require employees to respond with an "I accept" return e-mail. Moreover, the company did not use "the old fashioned ways of assuring notice" — such as by holding a meeting announcing the DRP with a sign-in sheet to keep track of which employees had shown up.

At the end of the day, the court noted that "when employees may be deluged with electronic messages and readily delete them, the question is whether a company can notify its employees of a substantial change in policy as General Dynamics did here." And, "while e-mail dispenses with many of the formalities of written communication, when information of this significance is conveyed, it may not be adequate." The court recognized that "e-mail is certainly an inexpensive and convenient means of notification," but "those same blessings bring drawbacks." "Whether used for work or for personal reasons," continued the court, "most users of e-mail inevitably receive incredible volumes of messages," and "it is often hard to distinguish the important from the frivolous." Thus, under such circumstances, "to presume that Campbell read the text of the e-mail, clicked on its links, and read the linked documents, and use that as a basis for depriving him or rights guaranteed him by federal law, would be to show an intolerably low level of respect for those rights."

While the court ruled that in this case that the "sending of a mass e-mail message, without more, fails to constitute the minimal level of notice required" by federal law, it is important to understand that the court was not creating a bright-line rule. Namely, the court did not rule that the sending of an e-mail like the one in this case never would be binding. For example, if there was evidence that Campbell actually had read and understood the e-mail and the links, then the notice likely would have been sufficient. And if Campbell had responded by confirming his agreement to the terms of the DRP, that notice likewise would have been adequate.

The real point of this legal decision is that just because electronic communications are quick and easy, they do not always get the particular job done. Especially when legal rights and obligations are at stake, counsel skilled in this area should be consulted before decisions are made and notices are sent.

Eric Sinrod is a partner in the San Francisco office of Duane Morris (www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. His column appears Wednesdays at USATODAY.com. His Web site is www.sinrodlaw.com, and he can be reached at ejsinrod@duanemorris.com. To receive a weekly e-mail link to Mr. Sinrod's columns, please send an e-mail with the word Subscribe in the Subject line to ejsinrod@duanemorris.com.