In Lampo v. Amedisys Holding, LLC and Leisa Victoria Neasbitt, the South Carolina Supreme Court establishes important legal precedent regarding contract formation for arbitration agreements between employers and employees. Specifically, the Court held that an employee’s silence does not constitute acceptance to form a binding contract that requires the employee to resolve all disputes by arbitration. The decision marks the Court’s philosophy that employers cannot impose contract modifications or unilaterally alter employment terms without clear consent.
Amedisys Holding hired Lampo in 2013 as a physical therapist. About a month later, Amedisys Holding sent an email to all employees with a link to receive “important time-sensitive materials that the Company requires that you read as they could affect your legal rights.” The link took employees to a form titled “Amedisys Arbitration Program,” which required every employee to submit all employment-related disputes to arbitration unless the employee opts out of the program within 30 days. Lampo “acknowledged” the form as required, and it directed her to a webpage containing the opt-out form. Lampo did not complete the opt-out form and continued working at Amedisys Holding.
After Lampo was fired from her position, she sued Amedisys Holding for wrongful discharge and other various claims. Amedisys Holding moved to compel arbitration, arguing that Lampo was bound by the arbitration agreement because Lampo did not opt-out of the arbitration program and continued her employment.
At the outset, the Court debunked the longstanding notion that South Carolina’s state policy favors arbitration and confirmed that arbitration agreements, whether in the employment context or otherwise, should be analyzed like contracts. After applying general contract principles, the Court did not dispute that Amedisys Holding’s email to Lampo was considered an offer. Instead, the Court focused its analysis on the second element: acceptance.
The Court found that Lampo’s silence and inaction – failing to opt-out of the arbitration agreement – was insufficient to demonstrate an unequivocal acceptance of the new contract terms. Any continued performance, in the Court’s view, was pursuant to Lampo’s original employment contract (which did not contain an arbitration provision) and did not indicate Lampo’s willingness and desire to be bound by the terms of the arbitration agreement.
To emphasize its point, the Court analogized mere silence with other actions an employer could theoretically take without requiring an express agreement from the employee, such as reducing salaries or altering employment benefits. The Court concluded that silence would never be enough for acceptance in those scenarios, and as such, should not be accepted under the present facts.
This case serves as a reminder and token of caution for employers. Employers should ensure that their arbitration agreements are provided at the outset of employment. If provided to employees after the beginning of employment, employers should ensure that arbitration agreements are expressly consented to through a signature acknowledging acceptance in exchange for additional consideration.
For questions or more information on this topic, please contact Alex Williams.