OPINION
Norma Ramirez sued Appellants Kmart Stores of Texas, L.L.C. and Sears Holdings Management Corporation (collectively Kmart) for disability discrimination. Kmart moved to arbitrate based on an agreement that Ramirez purportedly acknowledged through Kmart’s online employee portal and accepted by continuing to work for the company. The trial court refused to compel arbitration, and this appeal followed.
The central question here is whether Ramirez’s Tipps
We find Ramirez raised a fact issue, and the trial court did not abuse its discretion in denying Kmart’s motion to compel. The judgment of the trial court is affirmed.
BACKGROUND
Ramirez began working for Kmart as an at-will employee on May 23, 2010. In April 2012, Kmart introduced an arbitration policy requiring submission of all disputes between employees and the company to arbitration. Kmart maintains that by September 14, 2012, employees were required to complete a series of policy acknowledgments on Kmart’s My Personal Information (MPI) online portal.
When the agreement is posted, an employee must undertake several steps in order to access and acknowledge it. First, the employee must enter her user ID and password information into the MPI login page. After successfully entering login information, an employee is directed to the
The agreement admonishes an employee to read the terms carefully, “as it provides that virtually any dispute related to Associate’s employment must be resolved only through binding arbitration.” Specifically, the arbitration agreement states that “all employment-related disputes between you (‘Associate’) and Company that are not resolved informally shall be resolved by binding arbitration in accordance with the terms set below.” The agreement also states that if the employee does not wish to be subject to arbitration, the employee must opt out within thirty days. Per the agreement’s terms, “[b]y not opting out of this Agreement within the Opt-Out Period, Associate will be deemed to have agreed to be bound by this Agreement, including the arbitration provision[.]” The agreement also states that “[ajrbitration is not a mandatory condition of Associate’s employment at Company!.]”
The Opt Out form, contained behind the third link on the arbitration agreement page, allowed employees, per agreement’s terms, to cancel the agreement within thirty days. To opt out of the arbitration agreement, an employee must print the form and then either mail it or fax it to the address or phone number listed on the document.
When the employee clicks on the fourth link, the employee receives a prompt asking her to confirm acknowledgment and receipt of the arbitration agreement. The employee must then click both the “Yes” and “Submit” buttons to clear the screen. Once this screen is cleared, Kmart’s internal human resource records are automatically updated to reflect employee acknowl-edgement of the agreement.
Roberta Kaselitz, a compliance programs manager with Sears, stated in an affidavit to the trial court that Ramirez received copies of the arbitration agreement “as part of the February 2012 launch of the new Agreement” and in April 2012. As proof of this, Kaselitz testified that Kmart’s internal PeopleSoft' Human Resources Management System indicated that an “Arbitration Policy/Agreement ‘Course’ was created in the PeopleSoft system” with a start date of February 3, 2012. Kaselitz further testified in her affidavit that “[t]he ‘End Date’ column reflects Plaintiff acknowledged receipt of the Agreement on April 23, 2012.”
On March 13, 2013, Kmart terminated Ramirez’s employment. She filed suit for disability discrimination in October 2014. Kmart moved to arbitrate, submitting as evidence Kaselitz’s affidavit and attached exhibits setting out the arbitration agreement and demonstrative screenshots from the MPI portal system. Ramirez responded and filed an affidavit in which she stated that she had never electronically acknowledged or agreed to any arbitration agreement.
The trial court then held a Tipps eviden-tiary hearing, where Ramirez again denied ever receiving or agreeing to the agreement. The entirety of her direct examination testimony on this point is as follows:
A. No.
Q. Did you ever click on a purported screen saying that you acknowledge receipt of the arbitration policy or agreement link?
A. No.
Q. Were you ever presented with the arbitration agreement at any time during your employment?
A. No
Q. Either electronically or in writing?
A. No.
On cross-examination, Ramirez admitted to having using the MPI system before, and she denied ever giving her user ID information or password to anybody else. She also denied seeing certain sections of the MPI portal and testified that the only thing she remembered was the portion dealing with her W-2 forms. Ramirez admitted to having reviewed some policies electronically at the beginning of her employment, and she stated that she was familiar with Kmart’s general distribution of policies and procedures via electronic means. However, she denied ever logging onto Kmart’s network on April 23, 2012, except to clock in for work. She testified that she never saw the language on the MPI portal directing her to the arbitration agreement, and she did not know that other employees were subject to arbitration agreements. Kmart presented no new evidence at the hearing, but only moved to admit the evidence it had already submitted with its motion, including Kasel-itz’s Affidavit.
The trial court subsequently denied Kmart’s motion to compel arbitration.
DISCUSSION
In one issue, Kmart contends that the trial court erred by refusing to compel arbitration. Because Ramirez does not dispute that the terms of the Kmart arbitration agreement would require her to arbitrate disability discrimination claims, we consider only whether the evidence conclusively established both parties actually assented to that agreement. See Delfingen US-Tex., L.P. v. Valenzuela,
Standard of Review and Applicable Law
In reviewing the denial of a motion to compel arbitration, “we apply a no-evidence standard to the trial court’s factual determinations and a de novo standard to legal determinations.” Sidley Austin Brown & Wood, L.L.P. v. J.A. Green Dev. Corp.,
“[Djespite strong presumptions that favor arbitration, a valid agreement to arbitrate is a settled, threshold requirement to compel arbitration.” In re Estate of Guerrero,
Motions to compel arbitration are ordinarily decided in summary proceedings “on the basis of affidavits, pleadings, discovery, and stipulations.” Jack B. Anglin Co., Inc.,
Analysis
At the outset, we recognize that this is not the first time this Court has dealt with the issue of whether an employee’s electronic acceptance of an arbitration agreement is valid absent a physical signature.
Although the facts of this case track Firstlight closely, here, Ramirez specifically denied receiving notice of the arbitration agreement, whereas the employee in Firstlight never contested receiving notice. We also note that under the Texas Business and Commerce Code, “[a]n electronic record ... is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” Tex.Bus. & Com.Code Ann. § 322.009(a)(West 2015). “The effect of an electronic record or electronic signature attributed to a person ... is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law.” Tex.Bus. & Com.Code Ann. § 322.009(b).
Ultimately, how we resolve this fact question on notice determines whether this case is governed by Firstlight. If we determine Ramirez failed to raise a genuine fact issue on notice through her testimony, Firstlight controls, and arbitration is required. If her testimony is sufficient to create a fact issue on notice, we must defer to the trial court’s assessment of credibility and demeanor and affirm the lower court’s order.
Did Kmart Provide Competent Prima Facie Evidence of Acceptance?
We first address whether Kmart brought forth some evidence of notice. Ramirez asserts that in deciding this threshold issue, we should exclude Roberta Kaselitz’s affidavit and certain exhibits from our consideration because the trial court improperly admitted them into evidence over her objections that screenshots attached to the affidavit could not be authenticated and that the affidavit itself contained hearsay and impermissible opinion testimony. Kmart correctly notes that Ramirez did not cross-appeal these eviden-tiary rulings. However, Kmart as appellant and proponent of the agreement bears both the initial burden of establishing the agreement’s existence by legally sufficient evidence, and of negating any contravening evidence from Ramirez. United Rentals, Inc.,
Authentication and Hearsay
First, Ramirez argues that the Kaselitz Affidavit fails to authenticate the attached exhibits, in particular, a screenshot that allegedly showed that Ramirez received and acknowledge the arbitration agreement on April 23. Ramirez maintains that because Kaselitz did not witness Ramirez perform the transaction, she cannot verify the screenshot is authentic. We disagree.
“A piece of evidence’s authenticity is a prerequisite to admissibility.” United Rentals, Inc.,
Second, Ramirez contends that we cannot consider the following statement from the Kaselitz Affidavit in reaching our decision:' “On April '23, 2012, Plaintiff acknowledged receipt of the ‘Arbitration Policy/Agreement’ by clicking Yes’ and ‘Submit’ on the agreement’s acknowledgement page.” Specifically, Ramirez argues that Kaselitz failed to establish personal knowledge' that she saw Ramirez click through the.final screen, and as such, her comments are at best nothing more than speculative recitation of hearsay. However, Kaselitz’s assertions are inferences based on Kmart’s business records, and business records fall into a well-recognized exception to the hearsay rule.
Evidence is admissible under the business records exception if the proponent demonstrates: (1) the records were made and kept in the course of a regularly conducted business activity; (2) it was the regular practice of the business activity to create such records; (3) the records were created at or near the time of the event recorded; and (4) the records were created by a person with knowledge who was acting in the regular course of business. Puentes v. Fannie Mae,
Kaselitz never avers that she is a custodian of records, and her affidavit does not meet the formal requirements of Tex. R.Evid. 902(10) that would otherwise establish the predicate necessary for the records’ admission. Nevertheless, the records are admissible because she is a qualified witness under Tex,R.Evid. 803(6)(D). Again, she testified in her affidavit that she is a compliance programs manager with Sears’ Law Department. She testified that she is familiar with the' electronic systems that the company uses PeopleSoft to manage HR records, that “[a]mong the information maintained in PeopleSoft are [sic] some records of employees’ receipt of employment policies and participation in some of the compliance online training programs administered by the Company[,]” and that the records automatically update once an employee views documents. That is sufficient to demonstrate the records were kept in the regular course of business. As such, her screen-shot and the derivative statement are admissible.
The Kaselitz Affidavit Meets the Scintilla of Evidence Standard
Taking the Kaselitz Affidavit as a whole, Kmart met its prima facie burden of raising a fact issue on notice. Kaselitz testified that Kmart’s electronic records indicated that on April 23, 2012, Ramirez’s login information was used on Kmart’s computer system to access and view the arbitration agreement.
Did Ramirez Raise a Fact Issue on Notice?
Because Kmart cleared its initial eviden-tiary hurdle by offering the Kaselitz Affi
Kmart disagrees, and directs the Court’s attention to several federal district court decisions in which trial judges sided with Kmart and Sears or their affiliates and subsidiaries in enforcing this very arbitration agreement, concluding that an employee’s bare denial of notice cannot overcome business records showing that the employee logged in to an employer’s portal and electronically received notice of the arbitration agreement. See Washington v. Sears Logistics Srvs., Inc., No. 3:13-CV-3060-L,
While these cases involve the same or a similar electronic portal acceptance system with a thirty-day opt-out period, even as persuasive authority, the majority of Kmart’s federal district cases only demonstrate how various- trial judges resolved evidentiary discrepancies in the record. They do not address the dispositive appellate issue of whether the employee’s denial of notice raised a fact issue ripe for trial court resolution. Only Grynko touches on the pertinent issue of whether the employee raised a fact issue by denying notice, but the Grynko court summarily, concluded that the employee failed to raise a genuine fact issue under Ohio'law, and provides little help in answering whether Ramirez’s denial of notice constitutes more than a scintilla of evidence in Texas. It is clear that in all of the cases Kmart cites, the trial judges credited Kmart’s evidence over the employee’s testimony. But these cases do not answer whether we as a Texas appellate court must reverse the trial court’s decision here, when the judge decides under this set of facts that the scales tip towards the employee.
Although case law on this particular issue -is scant, we believe Ramirez’s denial was sufficient to create a fact issue that the trial court could resolve. Notice is a fact question, and ultimately, this case boils down to which version of facts the trial court credits. See Gunda Corp., L.L.C. v. Yazhari, No. 14-12-00263-CV,
Moreover, Kmart is an equally interested party, and it cites no authority in support of its contention that its electronic records constitute conclusive evidence as a matter of law. “[T]estimony by an interested witness may establish a fact as a matter of law only if the testimony could readily be contradicted if untrue, and is clear, direct and positive, and there are no circumstances tending to discredit or impeach it.” Preston Reserve, L.L.C. v. Compass Bank,
We are not unsympathetic to Kmart’s concerns that if we credit the trial judge’s findings here, the strength of many First-light-type arbitration agreements distributed through an electronic portal can be undermined by an employee’s oral denial of notice at a Tipps hearing, should the trial judge believe the employee. But that is a gamble every employer takes any time it foregoes an employee signature and instead hangs its hat on a fact finder’s determination of whether it met Halliburton's notice requirements. See Big Bass Towing Co. v. Akin,
In short, the evidence was legally sufficient to support the trial court’s ruling. Issue One is overruled.
The judgment of the trial court is affirmed.
Notes
. Jack B. Anglin Co., Inc. v. Tipps,
. Employees previously received and acknowledged employee policies on a training system known as the Online Performance Training System.
. We note that under the Texas Business and Commerce Code, an electronic signature is as valid as a physical signature. Tex. Bus. & Com.Code Ann. § 322.007(d)(West 2015). An "electronic signature” is "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Tex. Bus. & Com.Code Ann. § 322.002(8)(West 2015), Kmart does not specifically argue that Ramirez electronically signed the arbitration agreement, only that electronic evidence suggests she viewed the document and thus had notice of its contents.
. In Firstlight, the employer explicitly made arbitration a condition of continuing employment in its notice to the employee.
. We pause briefly to note that “[ejxcept in those instances specified by statute or rule, affidavits are not evidence in contested cases.” Ortega v. Cach, L.L.C.,
. Although Kmart never raises this point in its brief, we acknowledge that an electronic record may be attributed to a person if that record's creation was the result of a person's act. Tex.Bus. & Com.Code Ann. § 322.009(a). While the act of a person may be shown “in any manner” under this provision, we do not believe the mere existence of an electronic record can conclusively establish a person undertook an “act,” particularly in light of a person’s sworn denial. Additionally, while the code allows courts to infer an electronic record upon "a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributablef,]” id., no such showing was made here. In her affidavit, Kaselitz explains that she has knowledge of the company's computer system and electronic HR records, but she never vouches for the integrity of those records or explains any security measures Kmart uses to ensure its computer systems or software cannot be tampered with. Absent even that bare showing, we will not craft a rule that automatically credits an employer's records over an employee’s testimony as a matter of law.