Texas Supreme Court Provides Road Map for Insurance Carriers on Electronic Signatures

The Texas Supreme Court recently entered an opinion on the use of electronic signatures in a case against a staffing company and its computerized hiring application process.

According to the Texas Uniform Electronic Transactions Act, “an electronic record or electronic signature is attributable to a person [by] showing … the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.”

The court ruled that the electronic signatures on the mutual arbitration agreement (MAA) of four former employees completed during a computerized hiring application were valid and attributed to them, and they consented to the signatures based on the staffing company’s security procedures.

The former employees disputed and denied viewing and signing the MAA during a lawsuit against the staffing company and its client for racial discrimination and retaliation. The staffing company filed a motion to move the lawsuit to arbitration, which the trial court and court of appeals denied.

The Texas Supreme Court agreed that the staffing company provided enough evidence to show the efficacy of its security procedure in its computerized hiring application process. The court also stated that the former employees’ denial of viewing and signing the MAA was insufficient evidence to prove the signatures were invalid.

The case is AEROTEK, INC., Petitioner, v. Lerone BOYD, Michael Marshall, Jimmy Allen, and Trojuan Cornett, Respondents, Case No. 20-0290 in the Supreme Court of Texas.