If an arbitration agreement isn’t accessible, is it still valid? News & Analysis
By Kristopher A. Nelson
in September 2018
500 words / 3 min.
Tweet Share If a blind customer has to rely on employees to tell them about a mandatory arbitration agreement—and there’s no evidence an employee ever does so—is that still binding?
In a recent First Circuit appeal, National Federation of the Blind v. The Container Store, 2018 WL 4378174 (1st Cir. Sept. 14, 2018), a federal appeals court upheld a lower court’s decision that blind customers who signed up for a loyalty program with contract terms that mandated arbitration were not bound to that contract—because there was no evidence they had any reason to even know that such a provision existed.
The Container Store had been sued in a class action by the National Federation of the Blind and several of its members who alleged that the store’s point-of-sale terminals had no allowance for accessibility (including no tactile keyboards and no audio capacity for “speaking” text) and that blind customers had to publicly tell employees their private security information in order to complete many transactions.
The Container Store tried to get the case thrown out because the plaintiffs had signed up for their loyalty program—which contained the mandatory arbitration provision along with a class-action waiver.
As Liz Kramer explained in her post on the decision:
[The First Circuit] affirmed the critical findings of the district court: “it is undisputed that the in-store plaintiffs had no way of accessing the terms of the loyalty program, including the arbitration agreement”; and “No store clerk actually informed them that an arbitration agreement existed as a condition of entering the loyalty program.“ Therefore, even though “inability to read” is not generally a defense to contract formation, the court found no arbitration agreement was ever formed with these plaintiffs. Unlike other situations where plaintiffs who could not read knew or should have known that they were signing documents that implicated legal rights, in this case the court found “zero hint” that the loyalty program involved terms and conditions.
One extra wrinkle: one plaintiff had signed up online instead, and thus potentially could have read the terms and conditions. But because the agreement allowed for modifications by The Container Store at any time, the First Circuit found the entire contract to be “illusory” and “unenforceable” under Texas state law (the agreement said it was to be interpreted under Texas law).
- Liz Kramer, No Proof Blind Plaintiffs Aware Of Arbitration Clause, So Discrimination Class Action Proceeds In Court, Arbitration Nation, Sept. 19, 2018.
- Karla Gilbride, Appeals Court Rejects Container Store’s Hide-the-Contract Tricks, Public Justice, Sept. 19, 2018 (Gilbride argued the case before the First Circuit).
- Press Release: Lawsuit Filed Today Alleges The Container Store Discriminates Against the Blind, National Federation of the Blind, July 20, 2015 (the NFB is a plaintiff in the case).