Burying the Arbitration Agreement: Fourth Circuit Rejects Hidden Terms in Online Job Application

In a world increasingly shaped by online interactions and digital contracting, the enforceability of arbitration agreements depends heavily on how—and where—those agreements are presented. A recent decision from the U.S. Court of Appeals for the Fourth Circuit in Marshall v. Georgetown Memorial Hospital reinforces a vital principle in modern contract law: arbitration provisions must be conspicuous, accessible, and clearly agreed to. Anything less could render them unenforceable.

The court held that a job applicant had not entered into a binding agreement to arbitrate with the hospital because the arbitration clause was neither clearly presented nor reasonably noticeable on the employer’s digital application platform. Although the hospital argued that the agreement was validly formed when the applicant applied for a previous position years earlier, the court focused instead on how the agreement was displayed (or concealed) on the employer’s website.

The outcome serves as a warning to employers, businesses, and ADR professionals: burying arbitration agreements in digital interfaces risks both judicial rejection and reputational damage.

The Case: Marshall v. Georgetown Memorial Hospital

The dispute arose when a prospective employee applied for a job with Georgetown Memorial Hospital through an online platform. The hospital claimed that, as part of this digital onboarding, the applicant had agreed to binding arbitration for any employment-related disputes. However, the arbitration clause was located in a section of the website that required scrolling to view—a portion that was not visible unless the user took specific, non-obvious action.

The court emphasized that merely placing an arbitration clause somewhere on a website is not sufficient to establish a binding agreement. Notice and assent remain fundamental pillars of contract formation, especially in the context of digital contracting.

Further complicating matters was the hospital’s assertion that the arbitration agreement had actually been formed four years earlier, when the applicant had applied for a different position. The court expressed skepticism about the continued enforceability of that agreement, particularly where the applicant was not clearly reminded or prompted to reaffirm those terms in connection with the newer application.

Key Findings from the Fourth Circuit

The opinion contains several important observations that should be of interest to lawyers, HR professionals, and anyone involved in designing or enforcing arbitration agreements.

1. Conspicuousness Is Crucial

The court quoted prior authority holding that:

“A user who can conduct her business on one screen of a website is not presumed to have notice of content that would become visible only if the user took further action, like scrolling down to see additional screens.”

In other words, hidden terms are unenforceable terms. To form a valid agreement, the arbitration clause must be reasonably conspicuous to a reasonably prudent user. Placement, font size, and visual cues all matter.

2. Digital Design Affects Legal Validity

The Fourth Circuit emphasized that in the “internet context,” traditional contract principles require courts to consider the design and content of the relevant interface. This includes:

• Whether the user was presented with a clear prompt or notice of terms;

• Whether the arbitration clause was visibly linked or embedded;

• Whether further action (like scrolling or clicking) was required to view the clause.

If the arbitration clause is not displayed in a straightforward, accessible manner, courts are unlikely to enforce it.

3. Notice Must Be Timely and Relevant

The defendant's reliance on a four-year-old agreement—formed during a previous job application—was unpersuasive. The court found that such prior consent did not extend indefinitely, especially where the user was applying for a different job years later under different circumstances.

This reinforces the principle that parties must renew consent to arbitration terms when entering new or modified transactions.

4. Existence of the Agreement Is for the Court to Decide

An important procedural clarification emerged from the court’s approach. The hospital contended that the existence of the arbitration agreement was an issue of “arbitrability” and should be resolved by the arbitrator.

The court disagreed.

Consistent with Supreme Court precedent, the Fourth Circuit reiterated that whether a valid arbitration agreement exists is a threshold issue for courts to decide—not arbitrators. As previously discussed in [The Court Decides, Not the Arbitrator], arbitrability applies only when the existence of an agreement is undisputed. When formation itself is contested, judicial intervention is required.

Broader Implications for Arbitration Agreements

This case adds to a growing body of law emphasizing transparency and user-centric design in forming arbitration agreements. The following considerations are now essential:

✅ Present Arbitration Terms Clearly

Use clear, direct language. Display arbitration provisions on the same screen or require affirmative acknowledgment (e.g., checkbox or electronic signature).

✅ Avoid Passive Notice

Courts are increasingly skeptical of designs that assume consent based on mere access or continued use. Passive formats such as “browsewrap” are likely to be rejected unless supplemented by conspicuous prompts.

✅ Refresh Consent When Roles Change

When users return after a long gap, or when applying for different positions, resoliciting consent is prudent. Courts do not treat earlier consent as binding across all future interactions.

✅ Keep Records of Agreement

Digital systems should maintain audit trails confirming that users saw, acknowledged, and agreed to arbitration terms. This includes time stamps, digital signatures, and versioning.

Lessons for Employers and Online Service Providers

Employers and service providers should take this decision as a clear signal that designing enforceable arbitration agreements requires more than legal boilerplate. The digital context imposes real-world requirements for clarity, visibility, and interactivity.

Failure to meet those standards risks judicial invalidation of the arbitration agreement, potential litigation, and reputational harm.

Trusted Arbitration Services Start with Transparency

Whether structuring enforceable arbitration clauses or resolving disputes when agreements are questioned, clarity, fairness, and procedural soundness are paramount. The enforceability of arbitration depends not just on what the agreement says—but how and when it’s communicated.

At Nationwide ADR, experience in employment matters, consumer cases, and business disputes ensures that arbitration and mediation services are delivered with clarity, credibility, and compliance. From contract drafting guidance to resolution of contested arbitrability, Nationwide ADR is focused on one goal:

Unlocking Solutions for Demanding Cases.
Trusted. Balanced. Resolution Driven.

To learn more about how to ensure arbitration agreements are valid, fair, and enforceable, visit NationwideADR.com.