As we near the end of the year and employers check what policies and practices might need to be added, amended, or clarified, they often overlook their e-signature policy. With the rise in digitalization of onboarding documents and remote work, many employers rely on electronic signatures, or e-signatures, when requiring employees to sign important documents such as handbook acknowledgment waivers, non-competition agreements, or arbitration agreements. An e-signature can include digitally checking a box, signing with a mouse cursor, or typing one’s name into a text field.
For signed agreements to be enforceable, employers need to ensure that 1) the employee understands that their electronic signature has the same legal effect as a manual or “wet” signature; and 2) that the person signing the document is the correct employee. Disputes can arise when, for example, an employer seeks to enforce an arbitration agreement only to have the employee deny that they have ever seen or signed the agreement. A clearly stated, uniformly applied e-signature policy can protect employers from this later denial and head off any disputes about the authenticity of an electronically signed document.
Two-factor authentication (or “2FA”) is a process where users are asked to provide two different verification factors to access a website or app. 2FA ensures better security by confirming users are who they say they are, making it more difficult for others to access their accounts. Employers with the capacity to enable 2FA on hiring documents and employment agreements should do so to prevent claims that an employee did not sign the e-signed document.
State and federal laws recognize that an e-signature shall not be “denied legal effect or enforceability solely because it is in electronic form.” The federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act) and Uniform Electronic Transaction Act (UETA) created a framework to accept e-signatures. They apply to many types of transactions, including business and consumer transactions. Oregon’s Uniform Electronic Transaction Act, ORS 84, et seq., was enacted in 2001, while Washington’s law of the same name, RCW 1.80, et seq., went into effect in June 2020. Popular e-signature programs such as DocuSign claim to meet the requirements of the E-SIGN Act and UETA.
Employers that use e-signatures should consider a handbook policy that describes the legal effect of e-signatures and have signers acknowledge that they agree to e-sign on each occasion they are asked to do so. Archbright members can access a sample E-Signature Policy on mozzo.
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