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Terminated AT&T employee must arbitrate her claims because she did not opt out of arbitration agreement

The employee acknowledged she read the opt-out provision and failed to opt out; appeals court finds both notice and acceptance, as her silence equaled consent.

By Harold S. Berman J.D.

A discharged AT&T employee must arbitrate her age discrimination and wrongful termination claims against the company because she failed to opt out of an arbitration agreement when it was unveiled five years earlier, the First Circuit ruled. By not opting out, she manifested her intent to accept the arbitration agreement, as stipulated in emails sent out by AT&T announcing its arbitration plan. And, by acknowledging that she had read its opt-in/opt-out provision, she gave AT&T reason to believe that her silence indicated consent. Therefore, the appeals court affirmed a district court’s decision granting AT&T’s motion to compel arbitration (Rivera-Colon v. AT&T Mobility Puerto Rico, Inc., January 16, 2019, Thompson, O.).

Harassment. The employee worked as an assistant manager in an AT&T store in Puerto Rico. She alleged that in 2015, she was transferred to work in a kiosk an hour away, which essentially was a demotion. The kiosk had lower sales, less favorable hours, and fewer promotion opportunities. Additionally, the employee, who was 49, was assigned a supervisor 15 years her junior. She alleged the supervisor placed her on an improvement plan for no reason, and harassed her because of her age.

Arbitration agreement. A few years earlier, AT&T had introduced an arbitration plan. In November 2011, AT&T emailed the employee about the new plan, stating that “employees and the company would use independent, third-party arbitration rather than courts or juries to resolve legal disputes.” Acceptance of the arbitration plan was not mandatory, and the email included two links where the employee could opt out. The email stipulated that if the employee did not opt out by February 6, 2012, AT&T would consider that she had opted in. AT&T sent the same email to the employee again in December and January. The employee opened the link to the agreement and indicated that she had reviewed it. However, she did not click the additional link to opt out.

Lawsuit. In May 2016, AT&T terminated the employee, replacing her with a 34-year old. The employee sued AT&T and her supervisors in federal court, alleging age discrimination in violation of Title VII and Puerto Rico law, and wrongful termination. AT&T moved to compel arbitration. The employee argued that there was no valid arbitration agreement, and her failure to opt out did not meet the acceptance standard under Puerto Rico law, which required acceptance of a contract.

The district court ruled that the arbitration agreement was enforceable based on the evidence showing that the employee received AT&T’s emails about the arbitration agreement and acknowledged that she read the agreement, which showed that AT&T gave the employee explicit notice that all disputes would be resolved by arbitration. The First Circuit affirmed, but for the different reason that she accepted the agreement, not merely because she was on notice that the agreement existed.

Silence = consent. By her silence, the employee manifested her intent to accept the arbitration agreement. AT&T’s emails unrolling its arbitration program instructed that if employees did not affirmatively opt out, it would consider silence as opting in. The employee acknowledged that she read the opt-in/opt-out provision, which was clearly stated in the three emails AT&T sent out to employees, as well as in the arbitration agreement. By acknowledging that she read the opt-in/opt-out provision, she gave AT&T reason to believe that her silence evidenced an agreement to arbitrate her claims. Through her actions, the employee impliedly accepted the arbitration agreement, and she now was bound by it.

No opting-out after the fact. The court rejected the employee’s argument that her opposition to AT&T’s attempt to arbitrate showed that she never intended to accept the arbitration offer, and so she did not unequivocally show her will to consent. Rather, her objection to arbitrate when she began litigation in 2017 was irrelevant to whether she manifested her intent to accept the arbitration agreement in 2012. Under Puerto Rico law, a contract is formed and valid at the moment consent is given, and so the only issue for the court to consider was whether the employee manifested her intent to accept the agreement when she did not opt out in 2012.

AT&T reasonably construed her consent. The court also rejected the employee’s assertion that her actions showed only that she reviewed the arbitration agreement, not that she intended to accept it. Under well-established principles of contract law, if the employee kept silent knowing that her silence would be misinterpreted, then she would not be permitted to deny the natural interpretation of her conduct. The employee and AT&T had a longstanding employment relationship and regularly corresponded through email regarding company business as part of that relationship. Consequently, the employee knew she had an obligation to to speak, and that her choice to remain silent would reasonably be interpreted by AT&T as accepting the agreement. Because the natural interpretation of her conduct was that she accepted the agreement, she impliedly accepted the agreement and was bound by it.

No heightened standard of acceptance. The appeals court also rejected the employee’s arguments that the arbitration agreement was subject to Puerto Rico’s heightened standard of acceptance because it was both a waiver of substantive rights and a forum selection clause. Even if she waived a substantive right by waiving her right to a jury trial, under the FAA a state or territory could not apply a standard to an arbitration agreement that it did not apply to contracts in general. Similarly, even if the arbitration agreement constituted a forum selection agreement, under the FAA it could be voided as an arbitration agreement only for general contract defense grounds that would be applicable to all other contracts.