Electronic signature hygiene – taking steps to help ensure that your electronic signature process allows you to enforce a disputed signature

It is a common misperception that an entity only needs to have a person electronically sign a document for such document to be valid. While no electronic signature may be held invalid solely because it is in electronic form, an electronic signature’s validity can be attacked on other grounds. Two recent cases show the importance of developing an electronic signature process that (1) authenticates the person signing before he or she signs; (2) captures the person’s intent to sign the document; and (3) ensures record integrity. Failure to develop adequate processes regarding these elements of an enforceable electronic signature process will negatively impact an entity’s ability to prove that a particular signer created the signature and signed the document in the event of a dispute.

First, in Malone v. Hoogland Foods, LLC, 2020 WL 6158201 (W.D. Wis. Oct. 21, 2020), the court could not conclude that the plaintiff intended to sign the document in question. The plaintiff was hired by defendant and, as part of the employee onboarding process, the plaintiff had to create a user ID and password. However, the plaintiff stated that an employee of defendant was the person in front of the computer and she slid the keyboard to him and asked him to (1) create his user ID and password and (2) later enter in the same but without clicking any button. The plaintiff stated that he did not read what was on the computer and did not realize that by entering his user ID and password, he was signing the employment contract. The defendant produced a signed agreement with the plaintiff’s username in the signature field. The court stated that commentary to Wisconsin’s Uniform Electronic Transactions Act stated that an “intent to sign” was relevant to determining the existence of an electronic signature, including in a click-through transaction. The court stated that even if the plaintiff’s act of typing his password created a signature, that by itself does not establish that he intended to sign the employment agreement and leaves it open to dispute.

Second, in Read v. Eastside Medical Center, LLC, 2020 WL 5659436 (N.D. Ga. Sep. 23, 2020), the court denied the defendant’s motion to compel arbitration because even though the agreement contained a typed electronic signature, the defendants did not offer any evidence that plaintiff personally placed the electronic signature on the agreement. The court noted that just because plaintiff was admitted to a facility, and that signing the agreement was a precondition to entering the facility, that fact did not establish that plaintiff was the person who signed the arbitration agreement. Further, the court stated that under the Federal Rules of Evidence, there must be something more than the appearance of the item to authenticate it - particularly regarding documents that can be easily altered such as those generated by a computer.

Therefore, while the courts did not expressly say so, being able to introduce into an evidence a tamper-evident signed document, a tamper-evident audit log that contains specific elements of the signing process, and evidence regarding how such documents are made tamper-evident such that any alteration would be detectable would likely help allay judicial concern regarding whether the document presented before the court has been altered since it was signed.

To read more on the importance of audit logs, please see Audit logs: key to enforceable electronic signatures.  For further information, please contact any of the authors.