Yes. By not saying 'no' and continuing to work, the employee agreed to the new arbitration rule. The law doesn't care what the employee was secretly thinking or whether he actually read the email; it only looks at his actions. The company sent a clear email with an easy way to opt out, and it warned him that staying silent meant he was agreeing. Because he was an employee, the company could reasonably expect him to read his work emails and speak up if he disagreed. His silence was his answer.

Yes, Gupta agreed to the arbitration rule by staying quiet and continuing to work. Morgan Stanley's email was very clear about the new rule and what would happen if Gupta didn't opt out. Because Gupta worked for Morgan Stanley, it was reasonable for them to expect an answer from him about the new rule. When Gupta said nothing and kept working, it was like silently saying 'yes' to arbitration. The court said all of Gupta's claims have to be arbitrated because that's what the new rule he agreed to says. This fits with the general idea that courts should allow arbitration when both sides can be understood to have agreed to it, even if the agreement wasn't signed.

In determining whether an agreement's arbitration clause controls, federal courts apply state-law principles of contract formation.

—"reflects both a liberal federal policy favoring arbitration... and the fundamental principle that arbitration is a matter of contract."

—the plaintiff filed a lawsuit, the defendant immediately moved to compel arbitration, the district court concluded a trial was needed on the issue of contract formation, and the court ultimately granted summary judgment to the defendant on that issue.

But a court "cannot require a party to submit a dispute to arbitration unless he has agreed to do so."

Thus, because each of the award agreements incorporated the terms of the EIP (including the Forfeiture Provision), Plaintiff accepted the Forfeiture Provision when she accepted each of the awards.

—under Illinois law, a party to a contract may, by her acts and conduct, indicate her assent to its terms and become bound by its provisions even though she has not signed it

While these federal law principles apply generally to Korellis's motion to compel arbitration, the Court applies state law to determine whether MWB's third-party claims fall within the scope of the parties' agreement to arbitrate.

The Federal Arbitration Act (FAA) governs the enforcement, validity, and interpretation of arbitration clauses in employment contracts.

Yes. An employee's failure to opt out of a mandatory arbitration program constitutes valid acceptance under Illinois's objective theory of contract formation. The parties' outward conduct, not their subjective intent, determines whether a contract was formed. Morgan Stanley made a clear offer through the email, which was successfully delivered to Gupta. Gupta's silence and continued employment served as acceptance because the employer-employee relationship and the terms of the original CARE program made it reasonable for Morgan Stanley to expect a reply if Gupta intended to reject the offer. The company provided sufficient notice and a clear opportunity to opt out, making it reasonable to construe Gupta's silence as assent to the new terms.

Yes, Gupta's silence and continued employment after receiving the clear and informative email from Morgan Stanley about the arbitration agreement constituted acceptance of that agreement. The email provided explicit notice of the arbitration terms and the consequences of not opting out. The employment relationship between Gupta and Morgan Stanley made it reasonable for the company to expect a response from Gupta and to interpret his silence as assent to the arbitration agreement. Under Illinois law, an offeror may construe silence as acceptance if the circumstances make it reasonable to do so. Here, the parties' employment relationship, the clear terms of the email, and Gupta's continued employment after the opt-out deadline passed all support finding that Gupta objectively manifested assent to the arbitration agreement through his silence and conduct. The district court correctly compelled arbitration of Gupta's claims, which all fall within the scope of the enforceable arbitration agreement. This outcome aligns with the liberal federal policy favoring arbitration and the principle that arbitration is fundamentally a matter of contract.

Rajesh Gupta v. Morgan Stanley Smith Barney, LLC, et al.

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