Reported / Citable
Background
Abraham Zehaifi worked for Bank of America from August 2022 until October 2025. In November 2024, the bank emailed its U.S.-based employees a binding arbitration policy covering employment-related disputes. The email stated that employees accepted the policy either by clicking “Acknowledge and Agree” or by continuing employment for 30 days after distribution.
Zehaifi sued the bank in Texas state court in December 2025, alleging disability discrimination and failure to accommodate, retaliation, hostile work environment, and negligent supervision or retention and/or intentional infliction of emotional distress. After removing the action, the bank moved to compel arbitration and stay the case.
The Court’s Holding
Magistrate Judge Yvonne Y. Ho granted the bank’s motion. Applying Texas contract law, the court held that the bank gave Zehaifi unequivocal notice of the arbitration policy through the November 2024 email and policy materials, which explicitly stated that covered claims would be resolved by arbitration rather than a court or jury.
The court also found acceptance in two independent ways: the bank’s electronic records showed that Zehaifi clicked “Acknowledge and Agree,” and he continued working for roughly 11 months after receiving notice. The policy was not illusory because the bank could modify it only prospectively with 30 days’ advance notice. Zehaifi’s employment-related claims fell within the policy’s broad scope, so the court compelled arbitration, denied his request for an evidentiary hearing, and stayed and administratively closed the federal action pending arbitration.
Key Takeaways
- An employee’s electronic acknowledgment can establish assent to an arbitration agreement under Texas law.
- Continued at-will employment after clear notice of a new arbitration policy independently constitutes acceptance.
- A prospective-modification clause with advance notice does not make an arbitration agreement illusory.
Why It Matters
The decision underscores that clear electronic notice and reliable records of employee acknowledgment can support enforcement of workplace arbitration policies. It also confirms that, when a party requests a stay and all claims are arbitrable, the proper remedy is a stay pending arbitration rather than dismissal.