Ohio District Court Rejects Multiple Challenges to Electronically Signed Arbitration Agreement

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Following the United States Supreme Court’s decision three years ago in Epic Systems Corp. v. Lewis, courts have increasingly enforced arbitration agreements with class action waivers. We blogged about the Epic Systems decision here. While most courts and attorneys now accept the Epic Systems holdings, challenges are still being made but with generally little success, as a recent case demonstrates.

In Reulbach v. Life Time Fitness, Inc., Case No. 1:21 CV 1013 (N.D. Ohio, June 23, 2021), the plaintiff was employed as an hourly fitness instructor at the defendants’ fitness club. He contended that he was not paid for time performing duties such as attending meetings, training or cleaning fitness equipment. He brought suit in state court for violations of the FLSA, including collective action allegations, as well as individual claims for age discrimination.

After the defendants removed the case to federal court, they moved to compel arbitration and to stay proceedings in light of an arbitration agreement they had used with their employees. The employee raised several arguments, some of which are familiar in disputes regarding arbitration.

First, he asserted that he had never received a copy of the arbitration agreement and submitted a declaration to that effect. The court found, however, that the company’s electronic system reflected that he had received the agreement and had clicked “I agree.” In light of the electronic trail, the court concluded that the declaration created no genuine issue of material fact.

Second, the employee asserted a lack of consideration under Ohio law, but the court found that the mutuality of the obligation to arbitrate supplied the necessary consideration. It also concluded that the claims fell within the language of the agreement, which is not surprising as the very purpose of such an agreement is to sweep as many claims as possible into arbitration. It rejected arguments that FLSA claims were not subject to arbitration, an unsurprising finding as the Sixth Circuit has now twice held that such claims are arbitrable.

The Reulbach decision reflects that some plaintiffs will continue to make challenges to arbitration agreements with class waivers but that courts are now far less accepting of them in the wake of Epic Systems.

The bottom line: Courts will uphold electronically signed arbitration agreements even if the plaintiff does not remember reading them.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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