This week’s decision in Nat’l Fed’n of the Blind v. Container Store, Inc., 2016 WL 4027711 (D. Mass. July 27, 2016) is a call to action for every business that uses a click to accept type license or other agreements. Such agreements may not be enforceable in an ADA context unless special care is taken.
The case involved the Container Store’s loyalty program, which provides various perks and rewards. Customers could sign up when making a purchase at a store or online. In either case the process included clicking an “I Accept” button linked to the usual boilerplate terms and conditions, which included an agreement to arbitrate. The problem? Container Stores use a touchscreen Point of Sale device that is not accessible to the blind because it has no tactile controls. I blogged about the issue here, and the problem hasn’t gone away. The argument is straightforward. Blind customers cannot use the devices without giving personal information about their credit card information and email address to the clerk, while sighted customers can preserve their privacy on these matters.
Container Store does not reach this substantive issue, but concerns instead whether the arbitration provision in the terms and conditions of the loyalty program could be enforced against blind plaintiffs who signed up for it. The court found that the arbitration provision could not be enforced against plaintiffs who signed up in the store because there was no evidence they knew they were signing an agreement of any kind, let alone an agreement to arbitrate. Claims of the one plaintiff who signed up online were not excluded from arbitration based on the ADA* for reasons that help explain what businesses must and must not do when using clickwrap type licenses and agreements.
The first crucial holding is that:
Plaintiffs were not afforded the “minimal level of notice” sufficient to apprise them that they were agreeing to the Loyalty Program’s terms and conditions and so had waived their rights to pursue their ADA claims in court.
2016 WL 4027711, at *6. The problem for Container Store was that the process of enrolling on the in-store POS device could only be completed with the help of the clerk. Although the process included a display of the terms and conditions, there was no evidence that the clerks actually read the terms and conditions to the customer (in fact, it would be mind-boggling to believe that the clerks would plow through all the terms and conditions out loud).
For business the key point here is that boiler-plate agreements affecting ADA claims are subject to more scrutiny than ordinary agreements of this kind. A business can enforce an arbitration provision with respect to ADA claims only if (1) it can establish that the provision for mandatory arbitration is part of a valid contract within the purview of the FAA and (2) the enforcement of the arbitration provision would be appropriate under the ADA. Campbell v. Gen. Dynamics Gov’t Sys. Corp., 407 F.3d 546, 554–55 (1st Cir. 2005). In this case the complete inability of the plaintiffs to read the agreement made it easy for the Court to conclude enforcement was not appropriate. There are less extreme cases, however, where it might make a difference, including individuals whose disability was simply difficulty reading or comprehending written language. We can maintain the fiction that an ordinary consumer could read and understand a lengthy set of terms and conditions, but that fiction falls apart for individuals with dyslexia, attention disorders and the like. Merely making sure that blind individuals have real access to clickwrap terms and conditions may not be enough.
The Court also found that there was in fact no contract at all between the in-store plaintiffs and Container Store. After concluding that the inquiry as to the formation of a contract was for the court rather than an arbitrator to decide it concluded that because the in-store plaintiffs never saw or perhaps knew that there were terms and conditions no contract was ever formed. This was a state law issue, but is still important to businesses dealing with disabled individuals. The law of competence to contract is well developed, but in a world where many contracts are formed by clicking, competence to contract and actually knowing there is a contract are two different things.
The online plaintiff did not fare well on the claims related to disability, which is reminder to businesses about the importance of accessible web sites (now an issue of constant discussion that this blog recognized several years ago. See blogs here, here, here, and here.). The online plaintiff could not use his disability as a defense because the process of signing up online made the terms and conditions accessible to him. Overall website accessibility was not discussed, but it is clear that if a website were so poorly designed that a disabled customer could not know about the terms and conditions of a clickwrap license that license would not be enforceable. This goes beyond blind customers, and might include those with mobility impairments who cannot use a mouse or, again, those with reading difficulties. Accessible web design is required in these cases not because the ADA directly governs the website, but because an inaccessible website precludes the formation of a contract such as a license or waiver.
There is nothing surprising about the idea if a business relies on form agreements, including waivers, it must make sure its customers have a chance to read and accept them. National Federation of the Blind v. Container Store is a reminder that this may require something additional for disabled customers because if the agreement is not accessible, it will not be enforceable.
*The Court held that the agreement to arbitrate was illusory as to all plaintiffs because Container Store retained the right to amend its terms and conditions unilaterally and with retroactive effect. This has nothing to do with the ADA, but should be noted by businesses of all kinds because this kind of unilateral and retroactive amendment provision is extremely common. In order to avoid having all arbitration provisions voided businesses should make sure that amendment has no retroactive effect on claims subject to arbitration.