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Is My Electronic Signature Binding?

Is My Electronic Signature Binding?

Agreements may not be denied legal effect because they are in electronic form or have an electronic signature. California’s Uniform Electronic Transactions Act states,

[a]n electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person 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.

Many companies require new employees to sign key documents and policies electronically. Former employees challenge these signatures as inauthentic—particularly when trying to avoid arbitration agreements. Employees claim they either never signed the documents or cannot remember signing the document. Judges take these challenges seriously and hold employers to high standards to properly authenticate the employee signatures.

For “wet” signatures, it is usually fairly routine to authenticate a document. You show the employee the signature and confirm it is their signature. Or, the employee confirms a signature on one document with a sufficiently similar signature. Or, someone testifies they witnessed the signature.

How do you Authenticate an Electronic Signature?

Although the CUETA does not require heightened scrutiny of electronic signatures, many courts sometimes apply a seemingly heightened standard. In Ruiz v. Moss Brothers Auto Group, the trial court refused to enforce an electronically signed arbitration agreement based on authenticity questions. The employee claimed he did not sign the agreement, and would never have signed the agreement. The employer submitted a declaration claiming each employee logged into the HR system with a unique username and password to review and sign the agreement. The court said this was insufficient evidence to authenticate the signature.

The court noted the declaration did not explain that the electronic signature could only have been placed on the agreement by a person using the employee’s unique username and password. The declaration did not explain that the date and time printed next to the electronic signature indicated the date and time when the electronic signature was made. The employer did not explain that all employees were required to use their unique usernames and passwords when they logged into the HR system and signed electronic forms and agreements.

In a more recent decision, Espejo v. Southern California Permanente Medical Group, the court clarified what an employer must show to authenticate an electronic signature. Contrasting Ruiz, the court noted the employer offered “the critical factual connection that the declarations in Ruiz lacked.” The court pointed out the employer’s declaration detailed:

  • The electronic review and signature process for employee agreements,
  • The security precautions regarding transmission and use of an applicant’s unique user name and password, and
  • The steps an applicant would have to take to place his or her name on the signature line of the agreement.

The court determined the employer had a sufficient process in place to enable the systems consultant to properly authenticate the signature.

Electronic Signature Best Practices

If you are going to use electronic signatures, make sure your IT department can authenticate the signature. Can IT to determine when and from what IP address the document the employee signed the document?

You must be able to confirm no one but the employee could have signed the document, and that the employee in fact signed the document. Employees should have unique usernames and passwords to access the documents, and should create their own employee-created password before signing documents.

The company’s e-signature policies must comply with the CUETA and the federal E-SIGN Act.

If you are going to require electronic signatures, inform employees they need to review every document. Allow the employees to print the documents and provide sufficient time for review and execution.

Electronic signatures may be the wave of the future, but if done improperly, the employer may not get a second byte of the apple.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Using this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. Using the Internet or this blog to communicate with the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Employers Must Provide Written Offer Before Using E-Verify

This year, Governor Brown signed AB 622, expanding the definition of “unlawful business practices” for employers using E-Verify.  The federal E-Verify system is administered by three different federal agencies, enables participating employers to use the system, on a voluntary basis, to verify that the employees are authorized to work in the United States.

Existing law prohibits state entities from requiring an employer—other than those government entities—to use an electronic employment verification system, including E-Verify, except when required by federal law or as a condition of receiving federal funds. Employers cannot use E-Verify to retaliate against employees.  For example, if you have an employee that makes an complaint about a violation of the law, and you want to terminate that employee, you cannot use E-Verify to determine the employee’s immigration status and use that as a basis for termination.

AB 622 adds Labor Code 2814 expanding the definition of an unlawful employment practice.  The new law prohibits an employer or any other person or entity from using the E-Verify to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment.  There are exceptions when federal law requires E-Verify.

The new law is intended to prevent discrimination in employment rather than to sanction hiring persons who are not authorized to work in the United States.

Employers Must Provide Written Offers Before Using E-Verify

Does this mean employers cannot use E-Verify?  No.  It just means, unless specifically required by federal law, employers must provide written offers before using E-Verify.

If an employer using E-Verify receives a “nonconfirmation notice”—i.e., E-Verify cannot confirm the employee is authorized to work in the United States or the employee is potentially using someone else’s social security number—the employer must provide the employee any notifications issued by the Social Security Administration or the United States Department of Homeland Security regarding the nonconfirmation notice.

Employers violating Labor Code 2814 could face civil penalties of up to $10,000 for each violation.

Employers should never retaliate against an individual for engaging in protected activity.  Newly enacted Labor Code 2814 adds additional penalties against employers misusing the E-Verify or similar systems.  Employers must provide written offers before using E-Verify.  The offer letters should state the offer is contingent upon the employee passing required background checks and proof the employee is authorized to work in the United States.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, Berkeley, San Ramon, Concord, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.