HELPFUL LESSON ON AMENDING AN EMPLOYMENT AGREEMENT

Fisseha Gezu worked for Charter Communications from December 2007 to May 2019.  On October 6, 2017, Charter sent an email to all active, non-union employees announcing a new employment-based legal dispute resolution program called the Solution Channel (the “Program”).  The Program required employees to resolve certain disputes with Charter through binding arbitration.

For our purposes, there are two important facts to note at this point: (1) the Program was not in place when Gezu started working with Charter, and (2) the Program was announced via an email, which, in pertinent part stated:

By participating in Solution Channel, you and Charter both waive the right to initiate or participate in court litigation (including class, collective and representative actions) involving a covered claim and/or the right to a jury trial involving any such claim .  .  .  Unless you opt out of participating in Solution Channel within the next 30 days, you will be enrolled.  Instructions for opting out of Solution Channel are also located on Panorama.

The email also contained links to Charter’s internal intranet where the full details of the Program could be reviewed.  Additionally, that is where the Program’s opt-out instructions were available.

During his employment, Gezu allegedly suffered discrimination based on his race and national origin.  According to Gezu, Charter did not take any action to address the discrimination despite being made aware of it.  Instead, Charter ultimately terminated Gezu on May 8, 2019, based on what Gezu alleges were pretextual reasons.  As a result, Gezu filed a lawsuit against Charter on June 8, 2020.  Proceeding pro se, he asserted claims under Title VII of the Civil Rights Act and 42 U.S.C.  § 1981.

In response, Charter moved to compel arbitration and to dismiss the case, contending that Gezu and Charter were parties to a binding arbitration agreement.  In response, Gezu argued that no consensual arbitration agreement existed.

Following its review, the district court entered a judgment granting Charter’s motion to compel arbitration and dismissing the action without prejudice to Gezu’s right to demand arbitration.  Gezu timely appealed.

Determining whether a party should be compelled to arbitrate claims requires a two-step inquiry.  Step one focuses on “contract formation—whether the parties entered into any arbitration agreement at all.” Step two “involves contract interpretation to determine whether this claim is covered by the arbitration agreement.” In this situation, Texas law guides both factors.  Under Texas law, “[a]rbitration agreements between employers and their employees are broadly enforceable.” When, like here, an at-will employee is “not initially subject to an arbitration agreement” with his employer, but one is later imposed, the question becomes “whether the arbitration agreement [is] a valid modification of the terms of his employment.”

To show that such an agreement is a valid modification, the employer must demonstrate that the employee “(1) received notice of the change and (2) accepted the change.  Gezu urges that he did not “agree” to arbitrate his claims against Charter.  However, the appellate court determined that the record showed a valid modification to his employment contract—i.e., notice and acceptance.  On October 6, 2017, Charter sent an email notice to Gezu of its new Program aimed at “efficiently resolv[ing] covered employment-related legal disputes through binding arbitration.” The email stated that by participating, the recipient and Charter “both waive[d] the right to initiate or participate in court litigation .  .  .  involving a covered claim” and that recipients “would be automatically enrolled in the Program unless they chose to “opt out of participating .  .  .  within .  .  .  30 days.” According to the court, that language, along with the referenced links to additional information about the Program provided in the email, was sufficient to notify Gezu unequivocally of the arbitration agreement.

Thus, Charter established that Gezu was provided notice of the Program and the resulting change to his employment, meaning the court then had to review whether Gezu accepted that change.  The court found that he did.

The October 6, 2017, email “conspicuously warned that employees were deemed to accept” the Program unless they opted out within 30 days.  The email also provided recipients with directions on how to opt out.  Nonetheless, Gezu did not opt out of the Program and continued working for Charter for over a year until he was terminated in May 2019.  Accordingly, the court found that Gezu accepted the terms of the Program.

As a result, the appellate court determined that because Charter sufficiently demonstrated that Gezu both received notice of and accepted the modification to his employment contract, a valid agreement to arbitrate employment-related disputes exists between Gezu and Charter.