Carter filed an affidavit stating that Etienne filled out and signed most of the forms on his behalf, not explaining what they were and not offering him an option to decline or even allowing him to see the computer screen. U.S. District Judge Elaine Bucklo initially granted SP Plus's motion to stay the litigation pending arbitration but later acknowledged she had jumped the gun by granting the motion without notice to Carter.
After Carter filed his affidavit, Judge Bucklo lifted the stay, finding she could not determine that a valid arbitration agreement was formed because the defendant failed to engage with his account of the onboarding process. SP Plus did not present evidence contradicting Carter's account in the district court but instead immediately appealed.
Writing for a unanimous panel, Circuit Judge Frank Easterbrook held that SP Plus forfeited its right to challenge Carter's version of events by failing to present contradicting evidence in the district court. Easterbrook noted that it would have been easy for SP Plus to file an affidavit from Etienne stating that Carter personally agreed to arbitration, if Etienne remembered obtaining his assent.
Having said nary a peep on the subject in the district court, SP Plus forfeited any opportunity for a hearing, Easterbrook wrote. This meant that the district court's order conclusively denied the request for arbitration and was therefore appealable.
The court rejected SP Plus's argument that federal policy favors arbitration, citing the Supreme Court's 2022 decision in Morgan v. Sundance. The Seventh Circuit held that the federal policy is about treating arbitration contracts like all others, not about fostering arbitration.
Easterbrook was sharply critical of SP Plus's briefing, which characterized Carter's affidavit as self-serving. He wrote that a brief that repeats canards expressly rejected by decisions such as Morgan and Hill is hard to take seriously.
The ruling underscores that employers cannot rely on checked boxes or electronic signatures alone to establish arbitration agreements when employees present credible evidence they did not meaningfully consent to the terms. The Seventh Circuit affirmed the district court's denial of arbitration.