Burying the Arbitration Agreement

Agreements to arbitrate should be conspicuous and intentional.   In the case Marshall v. Georgetown Memorial Hospital, the Fourth Circuit determined that, because the prospective employee was not clearly made aware of an arbitration agreement, no agreement to arbitrate was consummated.

While there was issue in this case that the agreement was entered into 4 years prior, when the applicant applied for a different position with the defendant, what is really interesting is the discussion in the opinion.  A “user who can conduct her business on one screen of a website is not presumed to have notice of content that would become visible only if the user took further action, like scrolling down to see additional screens.”  The import of this is that, by being unaware of the arbitration agreement on an undisplayed portion of a webpage (hidden, perhaps?), the defendant appeared to be trying to trap, surreptitiously, the applicant into arbitration. 

 “In the internet context, the traditional notice inquiry focuses on ‘the design and content of the relevant interface,’ and asks whether it would put a ‘reasonably prudent user’ on notice of a contract on offer and its terms.  Offers and terms that are made ‘reasonably conspicuous’ generally will satisfy this standard.” (citations omitted) Here, the court determined, the website did not make the arbitration agreement reasonably conspicuous.

 Also worth noting is that it was the federal district court that determined whether or not an arbitration agreement existed between the parties, not an arbitrator.  As discussed in The Court Decides, Not the Arbitrator existence of an agreement is not an issue of arbitrability.  As such, it is the court to decide.