Gupta v. Morgan Stanley Smith Barney, LLC

934 F.3d 705 (7th Cir. 2019)

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Nature of the Case

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Facts

D hired P. P signed an employment agreement containing an arbitration clause 'agreeing to arbitrate any dispute, claim, or controversy. D administered an employee dispute resolution program called 'CARE,' an acronym for 'Convenient Access to Resolutions for Employees.' CARE applied to all U.S. employees and D posted a 'CARE guidebook' explaining the program on its intranet site for employee access. When P joined D, the CARE program did not require employees to arbitrate employment discrimination claims. The program did specify that the program's terms 'may change or be discontinued,' and that any such changes would be 'announced in advance' before becoming 'equally binding upon [the employee] and the Firm.' D amended its CARE program to compel mandatory arbitration for all employment-related disputes, including discrimination claims. To announce the amended program, Morgan Stanley sent an email to the account of each of its employees in the U.S. D emailed P the new arbitration agreement on September 2, 2015. The email's subject line read 'Expansion of CARE Arbitration Program,' and the email itself explained that effective October 2, 2015, 'final and binding arbitration' under the new 'CARE arbitration program' would be 'mandatory for all employees' unless an employee individually elected to opt-out. The final section of the email attached a link to the arbitration agreement opt-out form, explained instructions for submitting that form, and again notified P that he had until October 2, 2015, to decline. The email twice cautioned that, if the employee did not opt-out, continued employment would reflect that the employee 'consented and agreed to the terms' of the arbitration agreement and CARE guidebook. The email concluded with an assurance that opting out of the arbitration agreement would not adversely affect P's employment status. D also posted reminders on its intranet page that encouraged employees to 'carefully review the September 2 email from Human Resources' and once more instructed that, unless they chose to opt-out, continued employment would bind them to the terms of the new arbitration agreement. P did not respond. P continued to work for two more years until he alleges, the company forced him to resign because of imminent military leave. P sued for discrimination and retaliation in violation of the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. §§ 4301-35, and a related defamation claim. D moved to compel arbitration. P asserted that he never agreed to arbitrate. The district court agreed with D that Illinois law permits an offeror to construe silence as acceptance if circumstances make it reasonable to do so. Eventually, P conceded that he could have received the September 2 email in his work email account. As a result, he stipulated 'that the email arrived at his in-box.' The court found that P's receipt of the September 2 email, combined with his continued employment and failure to opt-out of mandatory arbitration, gave rise to an agreement to arbitrate. It granted D's motion to compel arbitration. P appealed.