Electronic signatures in arbitration agreements pose a potential challenge for employers, according to attorney Michael Kun, co-chair of law firm Epstein, Becker & Green’s wage and hour practice group.

One concern is that hackers based overseas could target companies’ computer systems and then sign arbitration agreements that have class action protections for random workers.

“While there is no evidence that this has ever happened anywhere, and no logical reason why it would, plaintiffs’ lawyers and even some courts seem to believe this could happen,” Kun wrote in a blog post for the law firm.

A 2017 court case led to an increase in employers implementing arbitration agreements with class and collective action waivers, he said.

“Those agreements have worked time and again to require courts to dismiss class or collective actions brought by plaintiffs who have signed such agreements,” Kun said. But ever-advancing technology, such as the use of electronic signatures, could lead to questions of whether an employee signed such an agreement in the first place, he added.

“That issue may give employees a way of escaping their arbitration agreements – and give those judges who don’t like the way employers use arbitration agreements a way to avoid enforcing them,” Kun said.

But employers can take several steps to safeguard themselves against the threat of hackers and show that an employee more than likely signed the agreement, according to Kun:

  • Ensure that the employee’s email account is not a shared one.
  • Allow the worker to choose his or her own username and password.
  • Make sure that no one else has access to an employee’s link, username or password.
  • Track the URL of the computer the employee is using to access and complete the documents.

“Even with these security precautions in place, employees may still contend that they did not sign their arbitration agreements,” Kun said. “And when that occurs, employers should ask the courts to conduct an evidentiary hearing to assess the employee’s credibility, particularly if the employee also electronically signed other documents containing private information that only he or she would know, such as a Social Security number, bank routing information, and contact information for friends and family.”

Read the blog post here.