Validity of Electronic Communications and Employee Electronic Signatures

Validity of Electronic Communications and Employee Electronic Signatures

Increasingly employees and employers prefer electronic communications (particularly electronic mail) over inefficient, slow, and often cumbersome transmission of paper copies of documents. But what about the legal validity of electronic communications and electronic employee signatures and consents? Will courts decline to enforce electronic communications on statutory, public policy, "unconscionability" or other grounds? How can employers increase the odds that a court (or an arbitrator) will enforce electronic communications, and electronic signatures, consents, and acknowledgements? Following is an excerpt from an expert commentary by Littler Mendelson's Tyler Paetkau and Jacy Grais, which addresses such questions and provide summaries of recent case law on this emerging employment law issue. Subscribers to lexis.com may purchase the entire Expert Commentary.
 
 
The courts continue to be receptive to electronic employee signatures on agreements, applications and acknowledgements (as distinct from original “hard copy” signatures). However, some courts have declined to enforce such “electronic” agreements where important policies or agreements are not called to the affected employees’ attention in a prominent manner.
 
Employers that move toward a system of electronic communication, recordkeeping and signatures are well-advised to follow some practical steps that may help ensure the validity of their employees’ electronic signatures and the electronic records they maintain. To avoid challenges to an electronic document or signature once it has been created, often the key is to demonstrate its trustworthiness by demonstrating the trustworthiness of the system that creates and manages the record or signature. Sufficient and appropriate systems documentation is critical in this regard. Employers should require employees to affirmatively indicate assent to electronically-distributed policies, such as by clicking a button that says “I agree,” and an employer should have a records management system that permits consistent, complete, and accurate preservation, retrieval, presentation, printing, and identical replication of the electronically signed and stored documents stored in its database. Time-stamping may also be a beneficial practice. In addition, when an employer distributes or announces a new policy via email, it should clearly indicate the importance of the policy in the subject line of the email, and should allow employees the time and opportunity to review and print the document before they are bound by it.
 
After a brief discussion of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act, this article provides summaries of recent cases regarding the enforceability of electronic communications and employee electronic signatures. By reviewing the case law in this emerging area of law, which tends to be very fact-specific, one can glean valuable practical guidance for employers seeking to enforce electronic communications and signatures. Some such guidance for employers follows the case summaries below.