Appellant Houston ANUSA, LLC d/b/a AutoNation USA Houston (AutoNation) appeals the trial court’s interlocutory order denying its motion to compel arbitration. In its first issue AutoNation contends it proved a valid arbitration agreement existed and that appellee Walter Shattenkirk failed to establish the affirmative defense of unconscionability. In the alternative AutoNation requests that we remand to the trial court for an evidentiary hearing. On original submission we held the trial court did not err by denying the motion to compel arbitration because the trial court could have concluded the agreement was unconscionable and denied arbitration on that basis. Houston ANUSA, LLC v. Shattenkirk, 657 S.W.3d 331, 337 (Tex. App.—Houston [14th Dist.] 2022), rev’d 669 S.W.3d 392 (Tex. 2023). The Texas Supreme Court granted review, reversed our judgment, and remanded for us to address the parties’ issues regarding whether Shattenkirk electronically signed the agreement. Houston ANUSA, LLC v. Shattenkirk, 669 S.W.3d 392, 399 (Tex. 2023). Concluding Shattenkirk raised a fact issue regarding whether he consented to the arbitration agreement, which must be resolved by an evidentiary hearing, we reverse and remand. BACKGROUND Appellant AutoNation owns and operates a car dealership in Houston, Texas. AutoNation hired appellee Walter Shattenkirk as a general manager in May 2017. In August 2017, Shattenkirk alleged that his superior at the car dealership made racist comments, which Shattenkirk reported to a Senior Director at AutoNation. One month later AutoNation placed Shattenkirk on a Performance Improvement Plan, and subsequently terminated Shattenkirk in November 2017. Shattenkirk asserts his termination was due to discrimination and in retaliation for his reporting the racist comments. According to AutoNation, as part of the onboarding process, Shattenkirk electronically signed and accepted an arbitration agreement requiring arbitration of all claims and disputes arising from, related to, or connected with Shattenkirk’s employment, including termination and discrimination claims. The agreement, which AutoNation attached to its motion to compel arbitration, states that any arbitration conducted thereunder will be governed by the Federal Arbitration Act (FAA) and “in conformity with the Federal Rules of Evidence, the Federal Rules of Civil Procedure, and the substantive law governing the claims pled.” The parties’ attorneys engaged in email communications about arbitration logistics, particularly the designated arbitrator. After efforts to agree on an arbitrator stalled, Shattenkirk sued AutoNation for discrimination and retaliation. Auto Nation filed a motion to compel arbitration in which it alleged that Shattenkirk entered into a binding arbitration agreement when he accepted employment with AutoNation. AutoNation alleged that Shattenkirk electronically signed and accepted the arbitration agreement using AutoNation USA Houston’s Human Resources’ Website. In response to AutoNation’s motion to compel, Shattenkirk alleged the arbitration agreement was not valid because he had not signed it, and, if the agreement was valid, raised the affirmative defense of unconscionability claiming the anticipated cost of arbitration was so high it effectively prevented Shattenkirk from asserting his claims. The supreme court remanded to this court for consideration of the issues regarding whether Shattenkirk signed the agreement. Id. ANALYSIS In two issues AutoNation challenges the trial court’s order denying its motion to compel, and, in the alternative, requests a hearing on its motion to compel arbitration. I. Standard of Review and Applicable Law We review a trial court’s order denying a motion to compel arbitration for abuse of discretion. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). Under the FAA, a party seeking to compel arbitration must establish the existence of a valid arbitration agreement and demonstrate that the disputed claims fall within the scope of that agreement. Wagner v. Apache Corp., 627 S.W.3d 277, 282 (Tex. 2021). The parties agree that the FAA applies and that, if the parties entered into a valid arbitration agreement, Shattenkirk’s claims fall within its scope. There are strong policies and presumptions favoring arbitration. See Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 899 (Tex. 1995). However, arbitration cannot be ordered in the absence of an agreement to arbitrate. See Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994); Branch Law Firm, L.L.P. v. Osborn, 447 S.W.3d 390, 394 (Tex. App.—Houston [14th Dist.] 2014, no pet.). Because arbitration is a creature of contract, a court must first decide whether an agreement was reached, applying state-law principles of contract. In re Poly–Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008). The elements of a valid arbitration agreement are: (1) an offer; (2) acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party’s consent to the terms; and (5) execution and delivery of the contract with the intent that it be mutual and binding. Advantage Physical Therapy, Inc. v. Cruse, 165 S.W.3d 21, 24 (Tex. App.—Houston [14th Dist.] 2005, no pet.). Contracts require mutual assent to be enforceable. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007). Evidence of mutual assent in written contracts generally consists of signatures of the parties and delivery with the intent to bind. Id. “[A] party manifests its assent by signing an agreement.” Rachal v. Reitz, 403 S.W.3d 840, 845 (Tex. 2013). In this case, Shattenkirk alleged he did not consent to the agreement because he did not execute the agreement through electronic means. AutoNation asserted that Shattenkirk followed its procedures and electronically signed the agreement thus consenting to arbitration. The central question, therefore, is whether AutoNation established that Shattenkirk consented to arbitration through electronic means. A. Electronic signatures in employment agreements In addressing the parties’ consent to arbitration, we note that the Texas Supreme Court recently addressed similar facts and issues. See Aerotek, Inc. v. Boyd, 624 S.W.3d 199, 201–03 (Tex. 2021). In Aerotek, an employer filed a motion to compel arbitration against its employees, contending that the employees were bound to arbitrate their dispute pursuant to signed arbitration agreements between the employer and its employees. Id. at200–02. The employees responded with affidavits denying that the employees “had ever seen, signed, or been presented with the [arbitration agreement].” Id. at 202. In an evidentiary hearing, the employer in Aerotek offered evidence of (1) a signed arbitration agreement between the employer and its employees; (2) its hiring and application process; and (3) evidence that established the efficacy of its security procedures for the electronic signatures placed on the documents. Id. at 203–06. The employer utilized multiple security procedures; importantly, the evidence showed that each employee was required to enter personal information known only to the employee during the application process and was later required to input a secure passcode, which was known only to the employee, to log into the program and electronically sign the documents. Id. at 204–06. The application program also recorded and timestamped the employee’s actions. Id. at 206. The application could not be submitted until all steps were completed and all signatures were provided. Id. As the Texas Supreme Court recognized, when a party signs a paper document, direct evidence can prove the genuineness of his signature, such as through a witness with the expertise to compare the signature against a genuine specimen. Id. at 204. However, an electronic signature requires “nothing more than clicking a box online and recording the information in an electronic database,” and therefore traditional methods of establishing whether a party’s signature is genuine are of no utility. Id. at 205. To address issues relating to the increasing use of electronic contracts, the Legislature enacted the Uniform Electronic Transactions Act(the Act). Id. at200, 205(citing Tex. Bus. & Com. Code ch. 322). In determining whether an electronic signature can be attributed to an individual, the Act’s focus is on the efficacy of the security procedures inherent in the electronic transaction itself. Tex. Bus. & Com. Code § 322.009(a) (providing that “[a]n electronic record or electronic signature is attributable to a person [by] showing . . . the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable”). The party seeking to hold another responsible for signing an electronic contract must come forward with evidence to establish the efficacy of the security procedures utilized in the transaction. Aerotek, Inc., 624 S.W.3d at 204. The Act defines a security procedure as any procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgment procedures. Tex. Bus. & Com. Code § 322.002(13). It is the efficacy of the security procedures used in an electronic transaction that “provides the link between the electronic record stored on a computer or in a database and the person to whom the record is attributed.” Aerotek, Inc., 624 S.W.3d at 205–06. Auto Nation as proponent of the arbitration agreement bears both the initial burden of establishing the agreement’s existence by legally sufficient evidence, and of negating any contravening evidence from Shattenkirk. See Rachal, 403 S.W.3d at 843; In Estate of Guerrero, 465 S.W.3d 693, 699 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). When a party has presented evidence conclusively establishing the efficacy of the security procedures utilized to obtain the other parties’ signature on an electronic contract and the opposing party has failed to come forward with any evidence of fraud or lack of reliability with respect to those procedures, a court has no choice but to enforce the contract. See Aerotek, 624 S.W.3d at 200, 205–07, 209– 10. With the above principles in mind, we turn to the question of whether AutoNation provided sufficient evidence to conclusively establish that the electronic transaction security procedures were sufficient to establish the genuine nature of Shattenkirk’s signature on the electronic contract in accordance with the Act. The Aerotek Court explained that security procedures may include requiring personal identifying information—such as a social security number or an address—to register for an account; assigning a unique identifier to a user and then tying that identifier to the user’s actions; maintaining a single, secure system for tracking user activities that prevents unauthorized access to electronic records; business rules that require users to complete all steps in a program before moving on or completing it; and timestamps showing when users completed certain actions. Aerotek, 624 S.W.3d at 205–06 (internal citations omitted). B. AutoNation’s evidence in support of arbitration In support of its motion to compel AutoNation attached the Arbitration Agreement, which contained the following notation: MY SIGNATURE ATTESTS TO THE FACT THAT I HAVE READ, UNDERSTAND, AND AGREE TO BE LEGALLY BOUND BY ALL OF THE ABOVE TERMS. I FURTHER UNDERSTAND THAT THIS AGREEMENT REQUIRES ME TO ARBITRATE ANY AND ALL DISPUTES THAT ARISE OUT OF MY EMPLOYMENT, EXCEPT AS EXPRESSLY PROVIDED OTHERWISE HEREIN. Below that paragraph, the following acknowledgement appeared: AutoNation also attached the affidavit of its Human Resources manager, Crystal Johnston, alleging that Shattenkirk electronically executed the Arbitration Agreement.[1] Johnston averred that Shattenkirk electronically executed the arbitration agreement through the following process: · A link to AutoNation’s HR website containing all necessary onboarding paperwork was sent to Shattenkirk’s email address. · Upon clicking the link and reaching AutoNation’s HR website, Shattenkirk entered his unique password to login. · AutoNation’s HR website provided the arbitration agreement to Shattenkirk (among other documents) and advised Shattenkirk that he had three days to review and accept or reject the arbitration agreement. · To confirm his acceptance of the arbitration agreement, Shattenkirk was required to type in the last five digits of his social security number, which he did on May 10, 2017 at 7:51 a.m. Johnston’s affidavit did not conclusively establish the security procedures used by AutoNation in their onboarding process. Johnston’s affidavit stated that Shattenkirk was required to input a unique password to login to its website and that the “onboarding paperwork” was sent to his email address. AutoNation did not present evidence establishing security procedures that would prevent unauthorized access, or demonstrate that users were required to complete all steps before moving on. Cf. Solcius, LLC v. Meraz, No. 08-22-00146-CV, 2023 WL 2261414, at *7 (Tex. App.—El Paso Feb. 27, 2023, no pet.) (mem. op.) (party seeking to compel arbitration provided evidence that it used DocuSign’s technology platform, which allows documents transmitted through DocuSign to only be opened by the individual with access to the customer-provided email address and “records the date and time of the execution of the Loan Agreement document by the customer, among other key information.”); Wal-Mart Stores Tex., LLC v. Peavley, No. 09-21-00403-CV, 2023 WL 1831122, at *4 (Tex. App.—Beaumont Feb. 9, 2023, no pet.) (mem. op.) (employee did not dispute completing the electronic hiring module and evidence showed the module could not be completed without acknowledging and consenting to arbitration agreement); H-E-B, LP v. Saenz, No. 01-20-00850-CV, 2021 WL 4733460, at *6 (Tex. App.—Houston [1st Dist.] Oct. 12, 2021, pet. denied) (mem. op.) (agreement could only be accessed by a unique identification number and password, which was corroborated by copies of the employee’s paperwork showing her unique identification number). AutoNation, however, did provide a copy of the arbitration agreement with Shattenkirk’s purported electronic signature and a time and date stamp. In that regard, while AutoNation failed to conclusively establish the efficacy of the security procedures used to obtain Shattenkirk’s purported signature, it furnished more than a scintilla of evidence showing Shattenkirk’s consent to the agreement. We turn now to Shattenkirk’s evidence that he did not consent to the agreement. See Kmart Stores of Tex., L.L.C. v. Ramirez, 510 S.W.3d 559, 568 (Tex. App.—El Paso 2016, pet. denied) (if the movant can furnish more than a scintilla of evidence showing the non-movant’s assent, the burden shifts to the non-movant to create a fact issue or else to raise technical legal arguments as to why the agreement fails despite the non-movant’s apparent assent). C. Shattenkirk’s evidence of lack of consent to the agreement[2] In support of Shattenkirk’s position that he never agreed to be bound by the arbitration agreement, Shattenkirk presented his own declaration in which he stated: On the night of his first day of employment, November 8, 2016, Shattenkirk flew to Fort Lauderdale, Florida for onboarding with AutoNation where he completed various documents “manually by hand and did not involve the use of a computer.” Shattenkirk’s first week of employment began November 8, 2016. Johnston was not present when Shattenkirk was “on boarded.” Shattenkirk did not recall “ever seeing [the arbitration agreement] or agreeing to any arbitration agreement by electronic means.” Shattenkirk did not recall receiving “any email from [AutoNation] on or around May 10, 2017.” Johnston never observed Shattenkirk access AutoNation’s HR website, enter a unique password, affirmatively accept the terms of “anything,” or enter the last five digits of his social security number. Shattenkirk was not on boarded in Houston in May 2017 as described by Johnston, but was on boarded six months earlier in Florida. Auto Nation asserts that Shattenkirk’s declaration merely stated that he could not recall consenting to the arbitration agreement, which would not be sufficient to raise a fact issue. To the contrary, Shattenkirk denied completing any employment documentation electronically, averring that he manually completed the employment agreements. We conclude Shattenkirk’s denial of completing any agreements electronically is some evidence that he did not consent to the arbitration agreement through use of an electronic signature. D. Evidentiary hearing required Motions to compel arbitration are ordinarily decided in summary proceedings “on the basis of affidavits, pleadings, discovery, and stipulations.” Jack B. Anglin Co., Inc., v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992). However, a motion to compel arbitration is procedurally akin to a motion for summary judgment and is subject to the same evidentiary standards. See In re Jebbia, 26 S.W.3d 753, 756–57 (Tex. App.—Houston [14th Dist.] 2000, orig. proceeding). Thus, the party alleging an arbitration agreement must present summary proof that an agreement to arbitrate requires arbitration of the dispute. In re Jim Walter Homes, Inc., 207 S.W.3d 888, 897 (Tex. App.—Houston [14th Dist.] 2006, orig. proceeding); Jebbia, 26 S.W.3d at 657. The party resisting may then contest the opponent’s proof or present evidence supporting the elements of a defense to enforcement. Jim Walters Homes, Inc., 207 S.W.3d at 897; Jebbia, 26 S.W.3d at 757. If a material issue of fact is raised, an evidentiary hearing is required. Jim Walters Homes, Inc., 207 S.W.3d at 897; see also Tipps, 842 S.W.2d at 269. Trial courts do not have the authority to resolve disputed fact issues concerning the formation of an agreement to arbitrate based solely upon affidavits. In re Weeks Marine, Inc., 242 S.W.3d 849, 862–63 (Tex. App.—Houston [14th Dist.] 2007, orig. proceeding). Pursuant to the supreme court’s decision in Tipps, the trial court must resolve the question of consent in this case with an evidentiary hearing. See Gunda Corp., L.L.C. v. Yazhari, No. 14-12-00263-CV, 2013 WL 440577 (Tex. App.—Houston [14th Dist.] Feb. 5, 2013, no pet.) (mem. op.) (reversing summary arbitration order and remanding for evidentiary hearing where employer had a purported signed copy of arbitration agreement that employee denied ever seeing or signing). The court in Aerotek concluded that the employer had produced clear evidence of a reliable and secure electronic signature procedure such that the signature found on the alleged agreement between the employer and employee could be attributed to the employee. Aerotek, 624 S.W.3d at 207, 209. Here, AutoNation did not produce clear evidence of a reliable and secure electronic signature procedure. Shattenkirk’s declaration was sufficient to raise a fact question as to his consent to the agreement. Shattenkirk argues that AutoNation is not entitled to a hearing on remand because it did not request a hearing in the trial court. In support of his argument Shattenkirk relies on section 4 of the FAA, which provides in pertinent part: A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement. . .. The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. . .. If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. 9 U.S.C. § 4. Contrary to Shattenkirk’s assertion, section 4 of the FAA, like Texas law, requires a hearing on formation of an arbitration agreement if a fact issue is raised. See Berkeley Cty. Sch. Dist. v. Hub Int’l Ltd., 944 F.3d 225, 241 (4th Cir. 2019) (Section 4 of the FAA “obliged the district court to conduct trial proceedings and thereby resolve those disputes before resolving the Arbitration Motion”); Mach. Co. v. Cargotec Sols., LLC, 762 F.3d 737, 744 (8th Cir. 2014) (“[B]ecause issues of fact remained on the formation of the arbitration agreement, the district court erred in failing to summarily proceed to trial on those issues as the FAA instructs.”); See also Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1983) (section 4 of FAA “call[s] for an expeditious and summary hearing, with only restricted inquiry into factual issues”). Moreover, Texas procedure controls the determination of arbitrability even if the FAA applies. See Southland Corp. v. Keating, 465 U.S.1, 16, n.10 (1984). This court has held that Texas authority requires the trial court to order an evidentiary Tipps hearing sua sponte where the facts are in dispute. Gunda Corp., Inc., 2013 WL 440577 at *6 n. 4. To the extent the trial court denied the motion to compel arbitration because AutoNation failed to establish consent, it abused its discretion because it could not decide the issue without holding an evidentiary hearing. See Tipps, 842 S.W.2d at 269. We sustain AutoNation’s second issue.[3] CONCLUSION We hold that a fact issue regarding whether Shattenkirk consented to the arbitration agreement by electronic signature must be resolved by evidentiary hearing. We reverse the trial court’s order denying AutoNation’s motion to compel arbitration and remand to the trial court for proceedings consistent with this opinion. Jerry Zimmerer Justice Panel consists of Chief Justice Christopher and Justices Zimmerer and Wilson.
