Judge Alison Mackenzie, Case Number: 23STCV05145, Date: 2024-01-05 Tentative Ruling

Judge: Alison Mackenzie, Case: 23STCV05145, Date: 2024-01-05 Tentative Ruling

Case Number: 23STCV05145 Hearing Date: January 5, 2024 Dept: 55

NATURE OF PROCEEDINGS: Defendants’ Motion to Compel Arbitration and Dismiss Plaintiff’s Complaint or in the Alternative, Stay the Complaint Pending Arbitration.

The motion is denied.

On 3/8/23, MERCEDES GUTIERREZ (“Plaintiff”) filed a Complaint against QSI, LLC; QSI OF CALIFORNIA, LLC; and GILBERTO BASULTO (“Defendants”) alleging that Plaintiff was hired as a general laborer cleaning machines, by the employer defendants, around November 24, 2020, and wrongfully terminated about March 7, 2022, without engaging in any interactive process, after she twice suffered work-related injuries, a supervisor harassed her, and she was not allowed meal or rest breaks.

Defendants now bring a motion to compel Plaintiff to arbitrate the Complaint, while this case is stayed or dismissed. Plaintiff opposes the motion.

FAA

As a threshold issue, Defendants contend that the Federal Arbitration Act (FAA) governs the arbitration agreement. The party seeking to compel arbitration pursuant to the FAA has the burden to demonstrate that an underlying agreement involves interstate commerce. Hoover v. Amer. Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1207-08). “Even when the Federal Arbitration Act applies, state law governs such matters as who is bound by and who may enforce an arbitration agreement.” Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614 n. 7. Under both state law and the FAA, “[w]hen a party to an arbitration agreement challenges the agreement as unenforceable, we decide the issue based on the same state law standards that apply to contracts generally.” Boghos v. Certain Underwriters at Lloyd's of London (2005) 36 Cal.4th 495, 501.

Even assuming for the sake of argument that the agreement in this case involves interstate commerce, the above-cited case law dictates that California law governs the determination of contract formation with respect to the arbitration agreement. The FAA, therefore, has no effect on this ruling.

Arbitration Contract Formation

A party seeking arbitration has the burden of proving by a preponderance of evidence that a valid arbitration agreement exists. Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842; see also § CCP 1281.2.

Defendants present two declarations from the HR Division Manager Juanaisela Hamilton (initial declaration dated 9/28/23 and supplemental declaration dated 12/28/23) and a copy of the arbitration agreement in support of their contention that they have established the existence of a valid arbitration agreement. Defendants contend that the evidence shows Plaintiff signed and entered into an arbitration agreement with QSI, LLC on 11/25/20, which also covers the other defendants. (Hamilton Dec., ¶¶ 12, 13, Ex. C; Mot. at 8-10.) Hamilton states in her initial declaration that the employer’s general procedure requires all employees to use an email address as their username and an employee-created password to log into a computer program called Workday to “electronically sign” the arbitration agreement. (Hamilton Dec., ¶ 10, 3:23-4:2.) Hamilton states that a screenshot from the Workday program shows Plaintiff “electronically signed” the arbitration agreement on 11/25/20. (Id., ¶ 13, 4:20.)

Plaintiff states that she does not recognize the arbitration agreement. (Gutierrez Dec., ¶ 9.) Plaintiff states that she only used a computer at work to watch training videos, after which she was asked to physically sign documents acknowledging she had completed the videos. (Gutierrez Dec., ¶ 4.) She claims she first accessed Workday in January 2021, when Hamilton provided her with a username and password to access the program, and that she only accessed the program to view her paystubs and tax forms. (Id., ¶ 5, 7.) Plaintiff states she contacted Hamilton in February 2021 to get her username and password, which Hamilton provided, attaching a text exchange between the two women. (Id., ¶ 6, Ex. 1).

Hamilton’s declarations contain inconsistencies that raise credibility questions and undermine Defendants’ claim that they have met their burden to show Plaintiff signed the arbitration agreement. For example, Hamilton reports that employees would affix their electronic “signature” to the arbitration agreement (e.g., Hamilton Dec., ¶ 10, 3:23), whereas exhibit B to her declaration shows an “Acknowledgment” signature type simply done by “clicking on the I Agree….” The arbitration agreement attached as Exhibit C does not contain any electronic signature or initials and Hamilton’s supplemental declaration provides no additional information regarding this issue.

Additionally, Hamilton stated in her initial declaration that “the employee must use an email address as their username and a unique confidential and secure password chosen by the employee to log in….” and then electronically sign the arbitration agreement (Hamilton Dec., ¶ 10, 3:25-26). But the declarations and exhibits do not state the username and password created by Plaintiff to purportedly log in and sign the arbitration agreement. Hamilton also fails to explain why Plaintiff’s username and password for Workday “was used to log into” the system in June 2020 (Id. ¶ 13, 4:18-19), four months before Plaintiff started working for Defendants.

Hamilton admits in her supplemental declaration that she gave Plaintiff a non-email username for Workday (Hamilton Supp. Dec, ¶ 9, 4:5-6), which contradicts her prior testimony that an employee “must” use an email address to access the system. Hamilton’s statement that Plaintiff texted her for her log in information for Workday in January 2021 (Id., ¶ 9, 4:6-7) infers that others besides Plaintiff could have had access to Workday and the arbitration agreement. Hamilton’s statement that the text message attached as Exhibit 1 to Plaintiff’s declaration is from February 2023, not 2021, is persuasive. But this quibble over the year of the text obscures the larger import of the text message: bolstering Plaintiff’s statements that she contacted Hamilton for her username and password when she needed access to Workday and that her username was not an email address (facts Hamilton did not mention in her initial declaration).

Additionally, Hamilton’s supplemental declaration is in part based on speculation not facts (e.g., Hamilton Supp. Dec., ¶ 9 (“Plaintiff would often have trouble accessing her Workday portal and to my understanding that was due to her personal email address containing many repeating letters (mercedesgutierrezz75@gmail.com). Therefore, with her approval, Plaintiff’s username was changed from her e-mail address to Gutierrez36425, which is her last name plus her QSI employee ID number. I believe Plaintiff forgot her password, and therefore she texted me for her log-in information in January of 2021.”)).

All things considered, the Court finds Plaintiff’s evidence to be more substantial and credible. Plaintiff’s declaration is detailed and persuasively denies creating a password to access any screen to assent to the arbitration agreement. Plaintiff’s statement that the employer created the username and password, which is further bolstered by the text message exchange, infers that someone other than Plaintiff could have accessed the screens without Plaintiff’s participation.

And on the other side, Defendants’ evidence is sufficiently inconsistent to raise doubts about whether Plaintiff allegedly signed the arbitration agreement. The Court therefore denies the motion on the basis of Defendants’ failure to show Plaintiff’s assent to an arbitration agreement, which is Defendants’ burden in the face of Plaintiff’s specifically challenging proof. Because the Court denies the motion on this basis, it does not need to reach the issue of conscionability raised in Defendants’ motion.