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In Hicks v. Macy’s Department Stores, Inc., No. C 06-02345 CRB, 2006 WL 2595941 (N.D.Cal. Sept. 11, 2006), Macy’s sought to compel arbitration with one of its employees pursuant to the company’s “Solutions InSTORE” (SIS) dispute resolution program. Hicks, an employee representing a putative class, had never actually signed the policy, but also failed to take advantage of several opportunities to “opt out” of the arbitration provision.
A United States District Court in California granted the motion to compel arbitration, finding that a valid agreement to arbitrate had been reached between the parties, and a signature was not necessary to bind Hicks to the agreement. The Court cited a similar case from the Ninth Circuit holding that an employee’s failure to opt out of a company dispute resolution was sufficient assent to an arbitration agreement to form a binding contract. Circuit City Stores, Inc. v. Njad, 294 F.3d 1104, 1109 (9th Cir. 2002). While the plaintiff in Njad did sign an acknowledgement form, it is “well-established that a party may be bound by an agreement to arbitrate even absent a signature.” Genesco v. T. Kakiuchi Co., 815 F.2d 840, 846 (2nd Cir. 1987).
The Court also rejected a challenge to the arbitration agreement’s class waiver clause on unconscionability grounds. In order to invalidate an arbitration agreement, the clause must be both procedurally and substantively unconscionable. Circuit City, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002). Here, the agreement was not procedurally unconscionable because Hicks had every opportunity to opt out of the agreement. Thus, the court found no need to analyze the agreement for substantive unconscionability, and compelled arbitration of the claims.
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