Rickes v. Thermo Fisher Scientific Puts Employer Email Rollouts on Notice

On August 5, the Ninth Circuit affirmed the district court’s denial of Thermo Fisher Scientific’s motion to compel arbitration, holding that it failed to prove that a former employee assented to a mutual dispute resolution agreement. 

Plaintiff Scott Rickes, a former manager at Thermo Fisher, brought a putative class action, alleging age discrimination and related claims under California law following his termination. Thermo Fisher moved to compel individual arbitration and to dismiss the class claims under its Mutual Dispute Resolution Agreement (the “MDRA”). Thermo Fisher distributed the MDRA to employees by email in 2019, and purported to bind any employee who did not opt out within 45 days of distribution. Thermo Fisher sent four emails regarding the MDRA to Rickes’ work email address, but its records did not reflect that Rickes had ever opened those emails or clicked the link to the arbitration agreement.

Thermo Fisher argued that plaintiff accepted the MDRA by continuing his employment past the 45-day opt-out window. The Ninth Circuit disagreed. Applying California law, the Court held that contract formation requires both notice of the proposed agreement and mutual assent. Bustamante v. Intuit, Inc., 141 Cal. App. 4th 199, 208 (2006). Although mutual assent can be inferred from a party’s conduct in appropriate circumstances, under California law, silence alone cannot constitute assent. Norcia v. Samsung Telecommunications America, LLC, 845 F.3d 1279, 1290 (9th Cir. 2017). Rather, mutual assent is only inferred through “interacting with the contractual terms.” The lower court’s decision that Thermo Fisher failed to “establish the existence of an agreement to arbitrate” was therefore upheld. 

Employers relying on email rollouts of arbitration agreements or amendments to such agreements should ensure they can prove both that employees received notice of the agreement and that they manifested assent, such as by requiring employees to open the agreement, acknowledge receipt, or electronically accept its terms. These recordkeeping practices should be applied to all documents that create or modify a contractual obligation with employees, including handbook and policy updates.