Hunton Retail Law Resource

Your arbitration clause may be solid. But your screen flow needs to be clear if you want a court to enforce it. 

Courts continue to evaluate online arbitration agreements under ordinary state-law contract formation principles: did the customer receive reasonably conspicuous notice, and did the customer take the action the site said would constitute assent? 

In practice, this means courts are not just reading the clause – they are also scrutinizing the online user interface around it. They are looking at clutter, button placement, hyperlink visibility, font size, and whether the page clearly tells the user what clicking means.  

On Monday, the US Supreme Court agreed to consider whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator. It is a question on which circuits have been divided. On one hand, some courts have found that the gateway question of arbitrability—whether the claims fall within the scope of the carve-out provision—is for the arbitrator to decide. On the other, some courts have found that, where there is a carve-out provision, there is no clear and unmistakable evidence of the parties’ intent to delegate questions of arbitrability to an arbitrator, and questions of arbitrability are to be decided by the court. Undoubtedly, resolution is necessary.

As reported on December 30, 2019 on the Hunton Employment & Labor Perspectives blog, Judge Kimberly J. Mueller of the United States District Court for the Eastern District of California granted a temporary restraining order that temporarily prohibits the state of California from enforcing AB 51, a law that would prohibit companies in California from requiring arbitration agreements as a condition of employment.