Acknowledging Receipt of a Document is Not the Same as Agreeing to its Terms

The federal District Court for New Jersey in an April 4, 2016, decision declined to automatically enforce an arbitration provision in an employment agreement (Ranieri v. Banco Santander). Instead, the Court ordered additional factual evidence be obtained (discovery) concerning the asserted agreement to arbitrate.

The employees signed a document containing the following language immediately above their signature:

"I certify, by my signature below, that I have received a copy of the Mortgage Sales Commission Plan, which has been provided to me."

The employees brought a class action lawsuit asserting minimum wage and overtime claims. The employer sought dismissal of the lawsuit and enforcement of an arbitration provision.

The District Court stated that there was a factual question concerning the enforceability of the agreement to arbitrate:

"The ambiguity stems from the sentence located directly above the signature line, which states that the signature below serves as confirmation that Plaintiffs received the Mortgage Sales Confirmation Plan. On one hand, Plaintiffs' signatures could memorialize only that they received the Plan; on the other hand, the signatures could represent their assent to agree to the terms of the MDO [Mortgage Development Officer] Agreement, as well as confirmation that they received the Plan. Defendants do not cite to, nor is the Court aware of, any cases where a signature served to bind a party under such ambiguous circumstances. As such, the Court cannot reach a conclusion one way or the other from the face of the complaint and the MDO Agreement alone."

Since the agreement in question was prepared by the employer, the Court cited the standard rule in contract law that any ambiguity is interpreted against the drafter (the party preparing the document).

The Court's decision might be appealed. Additional facts may or may not support enforcement of the arbitration provision. The stakes are high for the parties since either each employee claimant must engage in individualized arbitration or potentially a single lawsuit will determine all claims.

This is a cautionary decision highlighting the limitations of "acknowledge receipt" language standing alone. Either be certain that the full agreement containing all provisions is signed or include "agree to the terms" language along with the receipt language. One cannot be too careful.

This comment provides a brief and incomplete overview of a single judicial decision and is not intended to provide legal advice. Always consult an experienced attorney in specific situations.