The Sixth Circuit continued its pro-arbitration march in Tilman v. Macy’s, Inc. In this case, the Court reversed the district court’s denial of arbitration and held that an arbitration agreement had been formed notwithstanding the absence of any signed document from the plaintiff (a former employee of Macy’s). The Sixth Circuit’s opinion chronicles the history of communications between Macy’s and the plaintiff, including documents sent to plaintiff that purport to be binding on her unless she specifically opted out of the agreement. Notably, the plaintiff disputed that she ever received the documents that were mailed to her, but the Sixth Circuit made quick work of this issue, relying on the presumption that she received the materials because they were properly addressed and posted, and thus the receipt can be presumed. This presumption was significant because it obviated the need for a trial or evidentiary hearing on consent.
The plaintiff raised a variety of challenges to the opt out structure of the agreement, but the Sixth Circuit found little reason to be concerned, relying on basic state contract law concerning offer and acceptance. The Court acknowledged, however: “We recognize that opt out schemes for accepting arbitration contain a risk greater than in opt in systems that some employees do not know what they have agreed to…But we cannot say that under Michigan law an opt out system is inherently insufficient, and under the facts of this case a contract was created.” The Court also emphasized the employee’s conduct following the communication of the arbitration offer — she continued her employment without returning an opt out form. And the Court placed the burden clearly on the plaintiff “to show that she did not voluntarily and knowingly waive her right to a jury trial.”
This case is instructive in terms of the means for securing arbitration notwithstanding the absence of a signed agreement. This has particular relevance in the employee and consumer areas, especially with respect to mailing agreements to arbitrate.
Another aspect of note in this case is that the Court pointed out that it granted a stay pending appeal of the arbitration issue. Some of the circuits are split on whether a stay should be automatic when appealing the denial of an arbitration motion. The Court invited additional briefing on the question of whether the appeal of the denial of a motion to compel arbitration divests the district court of jurisdiction to proceed, but based on its disposition of the case, the Court declined to answer that question. That is certainly unfortunate, because this is an issue that is a recurring one when dealing with appeals of arbitration denials. It looks like we will have to wait until the next case to get an answer to this question.