Judge: Barbara M. Scheper, Case: 23STCV15061, Date: 2023-11-13 Tentative Ruling
Case Number: 23STCV15061 Hearing Date: November 13, 2023 Dept: 30
Dept. 30
Calendar No.
Ramos vs. Cornerstone
Staffing Solutions, Inc., et. al.,
Case No. 23STCV15061
Tentative Ruling
re: Defendants’ Motion to Compel
Arbitration
Defendants
Cornerstone Staffing Solutions, Inc., Jones Stephen’s Corp., and Ferguson
Enterprises, LLC (collectively, Defendants) move to compel Plaintiff
Daniel Ramos (Plaintiff) to binding arbitration, and to stay this action
pending completion of arbitration. The motion is denied.
“On petition of a party to an
arbitration agreement alleging the existence of a written agreement to
arbitrate a controversy and that a party thereto refuses to arbitrate such
controversy, the court shall order the petitioner and the respondent to arbitrate
the controversy if it determines that an agreement to arbitrate the controversy
exists, unless it determines that: (a) The right to compel arbitration has been
waived by the petitioner; or (b) Grounds exist for the revocation of the
agreement.” (Code Civ. Proc. § 1281.2,
subds. (a), (b).)
A proceeding to compel arbitration
is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance
Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be sought by a party
to the arbitration agreement. (Code Civ. Proc., § 1280, subd. (e)(1).)
The
petition to compel arbitration functions as a motion and is to be heard in the
manner of a motion, i.e., the facts are to be proven by affidavit or
declaration and documentary evidence with oral testimony taken only in the
court’s discretion. (Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th
394, 413–414.) The petition to compel must set forth the provisions of the
written agreement and the arbitration clause verbatim, or such provisions must
be attached and incorporated by reference. (Cal. Rules of Court, rule 3.1330;
see Condee v. Longwood Mgmt. Corp.
(2001) 88 Cal.App.4th 215, 218 (Condee).)
Once
petitioners allege that an arbitration agreement exists, the burden shifts to
respondents to prove the falsity of the purported agreement, and no evidence or
authentication is required to find the arbitration agreement exists. (See Condee, supra, 88 Cal.App.4th at p. 219.) However, if the existence of the
agreement is challenged, “petitioner bears the burden of proving [the
arbitration agreement’s] existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities
Corp. (1996) 14 Cal.4th 394, 413; see also Espejo v. Southern California Permanente Medical Group (2016) 246
Cal.App.4th 1047, 1058–1060.)
In this action, Plaintiff brings
claims against Defendants for whistleblower retaliation under the Labor Code,
unsafe workplace violation, assault, battery, and wrongful termination.
Plaintiff’s allegations arise from his employment with Defendant Cornerstone
Staffing Solutions, Inc. beginning March 2022. (Comp. ¶ 18.)
Defendants seek to compel Plaintiff
to arbitration based on a document entitled, “Notice to Employees About Our
Mutual Arbitration Policy,” which states that “Cornerstone Staffing Solutions,
Inc. . . . has adopted and implemented a new arbitration policy requiring
voluntary mutual binding arbitration of disputes for all employees, regardless
of length of service . . . it will govern all existing or future disputes
between you and the Company.” (Morrison Decl. ¶ 5, Ex. A [6].) The document
includes an “Employee Agreement to Arbitrate” (the Agreement), providing, “I
acknowledge that I have received and reviewed a copy of Cornerstone Staffing
Solutions, Inc.’s Mutual Arbitration Policy (‘MAP’), and I understand that it
is a condition of my employment. I agree that it is my obligation to make use
of the MAP and to submit to final and
binding arbitration any and all claims and disputes that are related in any way
to my employment, the termination of my employment with the Company, or my
assignment to a Customer, except as otherwise set forth in the MAP.” (Id. [7].)
The Agreement shows Plaintiff’s electronic signature, dated March 8, 2022.
Plaintiff
argues that Defendants have failed to establish the existence of an arbitration
agreement, because there is insufficient evidence verifying Plaintiff’s
electronic signature.
Gamboa v. Northeast Community Clinic (2021) 286 Cal.Rptr.3d 891, explains the three-step
burden-shifting process for determining the existence of an arbitration
agreement as follows: “First, the moving party bears the burden of producing
‘prima facie evidence of a written agreement to arbitrate the controversy.’
[Citation.] The moving party ‘can meet its initial burden by attaching to the
[motion or] petition a copy of the arbitration agreement purporting to bear the
[opposing party's] signature.’ [Citation.] Alternatively, the moving party can
meet its burden by setting forth the agreement's provisions in the motion.
[Citations.] For this step, ‘it is not necessary to follow the normal
procedures of document authentication.’” (Id. at 896.)
“If the moving party
meets its initial prima facie burden and the opposing party disputes the
agreement, then in the second step, the opposing party bears the burden of
producing evidence to challenge the authenticity of the agreement.” (Ibid.
[citing Condee v. Longwood Management Corp.
(2001) 88 Cal.App.4th 215, 219].) “The opposing party can do this in several
ways. For example, the opposing party may testify under oath or declare under
penalty of perjury that the party never saw or does not remember seeing the
agreement, or that the party never signed or does not remember signing the
agreement.” (Ibid.)
“If the opposing party meets its
burden of producing evidence, then in the third step, the moving party must
establish with admissible evidence a valid arbitration agreement between the
parties. The burden of proving the agreement by a preponderance of the evidence
remains with the moving party.” (Ibid.)
Here, the
Agreement attached to the Morrison Declaration is sufficient to satisfy
Defendants' initial burden to produce prima facie evidence of a written
agreement to arbitrate.
Plaintiff
has produced sufficient evidence to meet his burden on the second step.
Plaintiff states in his declaration, “[t]o my knowledge, I did not consent to
sign documents electronically in connection with my employment with any of the
Defendants in this action.” (Ramos Decl. ¶ 3.) Plaintiff further states, “I
have no memory of seeing the Notice to Employees About Our Mutual Arbitration
Policy and the Employee Agreement to Arbitrate. . . . That document does not
contain my signature in any form.” (Ramos Decl. ¶ 4.) This evidence satisfies
Plaintiff’s burden to challenge the authenticity of the Agreement. (Ruiz v.
Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846 [“In the face
of [employee's] failure to recall signing the 2011 agreement, [employer] had
the burden of proving by a preponderance of the evidence that the electronic
signature was authentic”].)
Accordingly,
for the third step, Defendants “must establish with admissible evidence a valid
arbitration agreement between the parties” by a preponderance of the evidence.
(Gamboa, supra, 88 Cal.App.4th at 219.) The procedure for
authentication of an electronic signature is provided under the Uniform Electronic
Transactions Act (UETA), Civ. Code §§ 1633.1 et seq. (See Ruiz,
232 Cal.App.4th at 843.) Under the
UETA, an electronic signature “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.” (Civ. Code, § 1633.9, subd. (a).) The effect of such electronic
signature “is determined from the context and surrounding circumstances at the
time of its creation, execution, or adoption, including the parties’
agreement.” (Civ. Code., § 1633.9, subd. (b).)
In Ruiz, the employer’s declaration seeking to authenticate the
plaintiff’s electronic signature on an arbitration agreement was deemed
insufficient under the UETA, where the declarant “summarily asserted” plaintiff
electronically signed the agreement and “did not explain how she arrived at
that conclusion or inferred [plaintiff] was the person who electronically
signed the agreement” or that the electronic signature “was ‘the act’” of the
plaintiff. (232 Cal.App.4th at 844-845.) By contrast, in Espejo v. Southern
California Permanente Medical Group, the “declaration offered the critical
factual connection that the declarations in Ruiz lacked,” by detailing
“security precautions regarding transmission and use of an applicant’s unique
username and password, as well as the steps an applicant would have to take to
place his or her name on the signature line” of the agreement. (Espejo v.
Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047,
1062.)
Here, Defendants’ initial evidence failed to show that Plaintiff
electronically signed the Agreement. Kara Morrison, Defendants’ Director of
Human Resources, asserted that Plaintiff electronically signed the Agreement on
March 8, 2022, but gave no explanation of “how she arrived at that conclusion
or inferred [Plaintiff] was the person who electronically signed the agreement.”
(Ruiz, 232 Cal.App.4th at 845.)
With their Reply, Defendants
present a supplemental declaration from Morrison. In it, she states that
Plaintiff electronically signed a number of other documents on March 8, 2022,
including a “Disclaimer” whereby Plaintiff agreed to give his consent
electronically. (Morrison Supp. Decl. ¶¶ 2-6, Ex. A.)
This evidence still fails to show
that the electronic signature on the Agreement was “the act” of Plaintiff. Morrison’s
supplemental declaration purports to verify Plaintiff’s signature on the
Agreement with the claim that Plaintiff also signed various other documents
electronically on March 8, 2022. But Morrison has not properly verified
Plaintiff’s electronic signature on these other documents in the first place; as
with the Agreement, she merely “summarily assert[s]” that Plaintiff signed them.
(Ruiz, 232 Cal.App.4th at 844.) She does not explain how Plaintiff’s
electronic signature “could only have been placed on the [agreements] ... by a
person using [Plaintiff’s] ‘unique login ID and password,” or “that all
[Defendants’] employees were required to use their unique login ID and password
when they logged into the HR system and signed electronic forms and
agreements.” (Ibid.) The supplemental declaration provides no
information regarding the “security
precautions regarding transmission and use of an applicant’s unique username
and password, as well as the steps an applicant would have to take to place his
or her name on the signature line.” (Espejo, 246 Cal.App.4th at 1062.)
Morrison also claims that
Plaintiff’s application included “personal information that only he could have
entered, including his address, date of birth, phone number, email
address, past job information, education, among others.” (Morrison Supp. Decl.
¶ 4, Ex. B.) However, it does not appear that any of this is information that
only Plaintiff could have known (compared to, e.g., a unique username and
password), and there is no evidence confirming that the information listed is
accurate. Because Defendants fail to authenticate Plaintiff’s signature on the
Agreement, they have not established the existence of an agreement to arbitrate
with admissible evidence. Accordingly, the motion is denied.