By: Kevin A. Fritz and Minh Vu
Seyfarth Synopsis: The Court of Appeals for the First Circuit says that an agreement to arbitrate presented visually to blind plaintiffs on a POS device and never read to them is not binding.
Season’s greetings! As the holiday season ramps up, retailers’ point-of-sale (“POS”) devices will again go into overdrive facilitating the holiday check out process and enrolling new loyalty program members. Retailers with POS devices that are not fully accessible to the blind should be aware that any loyalty program terms and conditions presented on these POS devices may not be binding on customers who are not able to read them because of a disability. Retailers should, at a minimum, put procedures in place to ensure that such terms are read to customers who are blind or have low vision, and make a contemporaneous record of this fact.
The First Circuit recently addressed this issue in National Federation of the Blind v. The Container Store, Inc. According to the Second Amended Complaint, The Container Store uses its touchscreen POS devices to enroll customers into its loyalty program. To enroll, customers must enter their phone number and email address. They must also enter this information to receive program benefits. The blind plaintiffs allege that The Container Store’s POS devices did not allow them to input this information independently. They allege that they should not have to reveal this private information to store employees and that The Container Store had violated the ADA and various Massachusetts state laws.
The Container Store filed a motion to dismiss arguing that the plaintiffs had agreed to an arbitration provision when they signed up for the program. This provision appeared on the POS device visually and there was no evidence that any employees read the provision to the plaintiffs or otherwise made them aware of it. Justice Souter, sitting by designation on the panel, wrote that “the in-store plaintiffs had no way of accessing the terms of the loyalty program, including the arbitration agreement, that appeared on the touch screen [and] no store clerk actually informed them that an arbitration agreement existed as a condition of entering the loyalty program.” As a result, there is no evidence that the plaintiffs “manifested their assent to arbitrate during enrollment.” The First Circuit also found that the agreement to arbitrate was not binding because it was part of an “illusory” contract. Specifically, the agreement said that The Container Store could “change, modify, cancel, add or remove any or all portions” of the contract terms “at any time,” which the Court found was really no contract at all.
With the arbitration issue resolved, this class action will continue and raises important questions about whether POS devices must be designed so that blind customers can independently input their email addresses and/or phone numbers, as opposed to just their debit card PINs. In the meantime, retailers that do use POS devices to present terms and conditions for loyalty programs should train their employees to read the terms and conditions to customers who are blind or have low vision, and refrain from imposing overreaching terms that may make the whole agreement illusory and unenforceable.