Internet Law
E-Commerce
E-Contract
Electronic Contract Formation
Computerized Hiring Application
Arbitration
Electronic Record
Electronic Signature
Texas Law
Federal Law
The Texas Uniform Electronic Transactions Act (the Act) states that “an electronic record or electronic signature is attributable to a person by showing . . . the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” (TEX. BUS. & COM. CODE ch. 322).
The issues before us are how the efficacy of a security procedure is shown and, once it is, whether the alleged signatory’s simple denial that he signed the record is sufficient to prevent attribution of an electronic signature to him. We hold here that attribution was conclusively established and therefore reverse the judgment of the divided court of appeals.
Aerotek hires employees globally by the hundreds of thousands to work as contractors for client companies. To keep hiring efficient, Aerotek worked with a software developer to build an online-only hiring application. Aerotek exclusively uses this computerized hiring application to guide employee candidates through the hiring process—a process sometimes referred to as “onboarding”. Aerotek’s hiring application automatically sends a welcome email to the email address the candidate has provided during the recruitment and initial interview process. The welcome email includes a unique hyperlink for the candidate to use to navigate to the hiring application’s online account-registration page. Once there, the candidate creates a unique user ID and password and selects security questions. To later log in to the hiring application, the candidate must enter this user ID, password, and security-question combination correctly. This login process takes place each time the candidate leaves and returns to the hiring application.
The computerized hiring application presents the candidate with employment information and various contracts to sign electronically. The first document requiring an electronic signature is an Electronic Disclosure Agreement (EDA). By signing the EDA, the candidate consents to “be bound” by Aerotek’s electronic hiring documents “as though . . . signed . . . in writing.” After the candidate signs the EDA, the application presents other documents to the candidate for completion and signature. These documents ask for personal information, such as addresses and emergency contacts. The application requires candidates to complete and electronically sign the documents in a particular order. After the candidate completes the initial documents, the application unlocks four additional documents, including a Mutual Arbitration Agreement (MAA). The candidate may electronically sign these documents in any order, but he must complete all four before the computerized application will allow him to continue and complete the hiring process.
As the candidate enters information and signatures on the documents, the hiring application tracks his progress. For nearly every action the candidate takes, the hiring application stores an electronic record in a database. For instance, each time a candidate electronically signs a document the hiring application stores a new electronic record that includes the candidate’s unique identifier, the type of document, and a timestamp showing the date and time the document was signed. Once the application records that information, Aerotek cannot change it.
A candidate who claims to lack the ability to use the computerized hiring application is invited to Aerotek’s office for assistance. But the candidate must still go through the hiring application step by step, providing the same information and signatures that would be required if he were not assisted.
From start to finish, the record shows that the Employees each took only a few minutes to complete the hiring application. For Cornett, timestamps show that he electronically signed the EDA on “11/15/16 11:29 PM” and the MAA on “11/15/16 11:56 PM”. He submitted his application for review on “11/16/16 12:15 AM”. For Marshall, timestamps show that he electronically signed the EDA on “11/17/16 6:31 PM” and the MAA on “11/17/16 6:42 PM”. He submitted his application for review on “11/17/16 6:43 PM”. For Boyd, timestamps show that he electronically signed the EDA on “11/22/16 10:32 AM” and the MAA on “11/22/16 11:02 AM”. He submitted his application for review on “11/22/16 11:07 AM”. And for Allen, timestamps show that he electronically signed the EDA on “3/14/17 4:22 PM” and the MAA on “3/14/17 4:31 PM”. He submitted his application for review on “3/14/17 4:32 PM”.
To compel arbitration, a party must prove that a valid arbitration agreement exists. For the MAAs to be valid, the Employees must have consented to them. The Employees argue only that they did not consent to the MAAs because the electronic signatures on the agreements are not theirs. They admit that they completed Aerotek’s online hiring application but deny that they were presented with the MAAs during that process.
(…) We express no opinion on how to authenticate a handwritten signature created electronically with a stylus, finger, or mouse. Cf. Mayton v. Tempoe, LLC, No. SA-17-CV-179-XR, 2017 WL 2484849, at *4 (W.D. Tex. June 7, 2017) (concluding that the defendants had carried their burden of demonstrating that plaintiff had agreed to arbitration by signing his name on an electronic pen pad).
(…) See Fries Rest. Mgmt., LLC v. Silva, No. 13-18-00596-CV, 2020 WL 4381994, at *3 (Tex. App.—Corpus Christi July 30, 2020, pet. filed) (concluding that the evidence conclusively demonstrated the existence of a valid arbitration agreement where the defendant presented uncontroverted testimony that it exclusively used a specific online system for hiring employees and that it would have been impossible for the plaintiff to be added to payroll without the plaintiff’s having electronically signed the arbitration agreement).
Once parties to a transaction have “agreed to conduct it by electronic means, the Act provides a standard for attributing electronic signatures to them. Section 322.009(a) provides that an “electronic signature is attributable to a person if it was the act of the person.” That “may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” Section 322.002(13) defines a security procedure as any “procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record”, including “the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgment procedures.” Thus, security procedures may include requiring personal identifying information—such as a social security number or an address—to register for an account; assigning a unique identifier to a user and then tying that identifier to the user’s actions; maintaining a single, secure system for tracking user activities that prevents unauthorized access to electronic records; business rules that require users to complete all steps in a program before moving on or completing it; and timestamps showing when users completed certain actions. These examples are illustrative and not exclusive under Section 322.009(a). The efficacy of the security procedure provides the link between the electronic record stored on a computer or in a database and the person to whom the record is attributed. A record that cannot be created or changed without unique, secret credentials can be attributed to the one person who holds those credentials.
Aerotek’s evidence showing the security procedures its hiring application used to verify that a candidate electronically signed his MAA was uncontroverted. To enter the application, a candidate was required to create for himself a unique identifier, a user ID, a password, and security questions, all unknown to Aerotek. The candidate was required to enter personal information and sign documents by clicking on them. The application recorded and timestamped the candidate’s every action. The application’s business rules made it so that the application could not be submitted until all steps were completed and all required signatures provided, including on the MAA. Once a candidate submitted his application, Aerotek could not modify its contents. Aerotek provided the signed MAAs marked with timestamps identical to those in its database records showing each Employee’s progress through the application.
(…) Moreover, the Employees could have requested forensic tests of the hiring application to show that it did not operate as Marsh described, but they did not.
(…) The Employees complain that Aerotek’s prevailing here would establish “an irrebuttable presumption” that electronic signatures on corporate records are valid. That is simply untrue. The Employees were free to seek discovery to discredit Aerotek’s evidence. They chose not to. Rather than attacking the reliability of the hiring application’s security procedures with evidence of their own, they chose to rely on mere argument. Because arguments are not evidence, no evidence supports the Employees’ contentions.
(…) It has long been the law in this State that “any mark” can qualify as a person’s signature, including a simple cross mark. Cf. Howard v. Colquhoun, 28 Tex. 134, 138 (1866); see also Bustillos v. State, 213 S.W.2d 837, 841 (Tex. Crim. App. 1948) (“To sign, in the primary sense of the word, is to make any mark. To sign an instrument or document is to make any mark upon it in token of knowledge, approval, acceptance, or obligation.” (quoting In re Walker’s Estate, 42 P. 815, 816 (Cal. 1895))) (cleaned up).
In sum, Aerotek’s evidence of the security procedures for its hiring application and its operation is such that reasonable people could not differ in concluding that the Employees could not have completed their hiring applications without signing the MAAs. The Employees’ simple denials are no evidence otherwise.
(…) Moreover, the Legislature is not the only policymaking body trying to keep pace: so, too, is Congress. In 2000, Congress enacted the Electronic Signatures in Global and National Commerce Act (the ESIGN Act). Section 7001 expressly provides that “with respect to any transaction in or affecting interstate or foreign commerce . . . a contract relating to such transaction may not be denied legal effect, validity, or enforceability because an electronic signature or electronic record was used in its formation.” States may “modify, limit, or supersede” Section 7001 “only if” their changes are either consistent with the Uniform Electronic Transactions Act or the ESIGN Act itself. Because online interactions increasingly affect “interstate” and “foreign commerce”, courts must be wary of construing the Act in a way that raises preemption’s specter.
Aerotek conclusively established that the Employees signed, and therefore consented to, the MAAs, and the trial court erred in denying Aerotek’s motion to compel arbitration. The judgment of the court of appeals is reversed, and the case is remanded to the trial court for further proceedings.
(Texas Supreme Court, Aerotek, Inc. v. Boyd, May 28, 2021, Docket No. 20-0290, Hecht, C.J.)
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