Denying an employer's motion to compel arbitration of a sexual harassment suit, a New York federal court held that an employee's silence and failure to return an opt-out form did not amount to acceptance of arbitration.

In Manigault v. Macy's East, LLC, 506 F. Supp. 2d 156 (E.D.N.Y. 2007), Manigault began working for Macy's in 2002. In 2003, Macy's launched a dispute resolution program requiring employees to arbitrate disputes. Macy's conducted informational meetings at each of its stores to explain the program. It also mailed an information packet about the program to its employees in October 2003. The packet included an Election Form that employees could sign and return if they did not wish to participate in the mandatory arbitration program. Otherwise, the packet stated that employees assented to arbitration by failing to return the Election Form. Manigault asserted she never received the information packet.

In August 2004, Manigault alleged Whittaker, another Macy's employee, sexually harassed her. She complained to a Macy's executive and human resources director, but the harassment did not stop. She then sued Macy's and Whittaker for sexual harassment. Macy's moved to compel arbitration based on the arbitration agreement contained in the dispute resolution program. Manigault opposed the motion by asserting she had not assented to arbitration.

The Court denied Macy's motion, holding that Manigault's silence and inaction did not amount to acceptance of the arbitration agreement. A fundamental principle of contract law is that even if an offeror states silence will constitute acceptance, an offeree retains the right to remain silent without accepting the offer. The Court also rejected Macy's assertion that silence constituted acceptance based on the parties' prior dealings. The mere fact that Manigault attended the meeting where Macy's explained its dispute resolution policy did not amount to a course of dealing because Manigault "did not say or do anything that could have given Macy's reason to understand her silence would constitute acceptance." Finally, the Court concluded, "that no unilateral conduct on the part of an offeror, regardless of how extensive or well-intentioned, can ever be the basis for the creation of a binding agreement in the face of an offeree's utter silence and inaction."