Judge: Holly J. Fujie, Case: 22STCV26362, Date: 2023-03-16 Tentative Ruling

Case Number: 22STCV26362    Hearing Date: March 16, 2023    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY:  Defendants (collectively, “Moving Defendants”)

RESPONDING PARTY: Plaintiff

            The Court has considered the moving, opposition and reply papers.  On March 13, 2023, Plaintiff filed a “sur-opposition” without seeking leave of Court and on March 14, 2023, Moving Defendants filed an opposition thereto.  As Plaintiff has not provided authority for filing a supplemental brief absent leave of Court, the Court STRIKES the “sur-opposition” papers.

BACKGROUND

            This matter arises out of an employment relationship.  The currently operative first amended complaint (the “FAC”) alleges: retaliation in violation of Labor Code section 1102.5, subdivisions (b) and (c); (2) wrongful termination in violation of public policy; (3) violation of California Business and Professions Code section 17200; (4) failure to provide personnel records in violation of Labor Code section 1198.5; (5) failure to provide wage statements in violation of Labor Code section 226, subdivision (b); and (6) intentional infliction of emotional distress.

On February 8, 2023, Moving Defendants filed a motion to compel arbitration (the “Motion”) on the grounds that when Plaintiff began his employment, he entered into a contractual agreement to have his claims adjudicated in binding arbitration. 

REQUEST FOR JUDICIAL NOTICE

            Moving Defendants’ Requests for Judicial Notice are GRANTED.

EVIDENTIARY OBJECTIONS

            Plaintiff’s evidentiary objections are OVERRULED in their entirety.  Moving Defendants’ evidentiary objections are also OVERRULED. 

DISCUSSION

Legal Standard

The purpose of the Federal Arbitration Act (“FAA”) is to move the parties in an arbitrable dispute out of court and into arbitration as quickly and easily as possible.  (Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 23.)  The FAA is consistent with the federal policy to ensure the enforceability, according to their terms, of private agreements to arbitrate.  (Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 57.)  A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract.  (CCP § 1281.)  California law, like federal law, favors enforcement of valid arbitration agreements.  (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.)  On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy unless grounds exist not to compel arbitration.  (CCP § 1281.2.) 

The party moving to compel arbitration bears the burden of producing prima facie evidence of a written agreement to arbitrate the controversy.  (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)  The moving party can meet its initial burden by attaching a copy of the alleged arbitration agreement purporting to bear the opposing party’s signature.  (Id.)  Alternatively, the moving party can meet its burden by setting forth the agreement’s provisions in the motion.  (Id.)  It is not necessary to follow the normal procedures of document authentication.  (Id.)  If the moving party meets its initial prima facie burden and the opposing party does not dispute the existence of the arbitration agreement, then nothing more is required for the moving party to meet its burden of persuasion.  (Id.)

If the moving party meets its initial prima facia 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, which can be done in several ways.  (Id.)  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.  (Id.)  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.  (Id.)

In support of the Motion, Moving Defendants provide evidence of the employment offer letter (the “Offer Letter”) signed by Plaintiff on February 7, 2007.  (See Declaration of Marria McGee (“McGee Decl.”) ¶ 9.)  The Offer Letter provides, in part:

“This offer is contingent upon receipt of the signed copy of this letter, a satisfactory background investigation, and proof of your employment eligibility in the United States. 

Finally, as an associate of WellPoint, you will be subject to the Company’s binding arbitration policy, as more fully described on the Human Resources Intranet Site, Arbitration.”  (McGee Decl. ¶ 9, Exhibit 6.) 

On February 18, 2007, the day he began working, Plaintiff signed a form acknowledging that he had access to the Associate Handbook located in Moving Defendants’ intranet portal.  See McGee Decl. ¶ 9., Exhibit 7.)  This acknowledgement form provides, in part:

“I recognize that I have access to a copy of the Associate Handbook (the “Handbook”) via the WellPoint internet web site and understand that I am responsible for reading and abiding by the policies and procedures in the Handbook. … I understand that the Handbook does not alter my at-will employment relationship with WellPoint as defined in the Work Environment section of the Handbook.  I further understand that WellPoint reserves the right to modify, delete or add to, as it deems appropriate and at any time, the policies, procedures, benefits and other general information in the Handbook.”  (McGee Decl., Exhibit 7.) 

The homepage of the online Handbook states, in part:

“The HR policies on this intranet site supersede and replace any inconsistent policies or practices and replace any past handbooks or HR policies.  These policies are not intended to be a contract (express or implied), nor are they intended to otherwise create any legally enforceable obligations on the part of the company or its associates.  As a growing and changing company, or HR policies and procedures are continually evaluated and may be amended, modified, or terminated at any time, without notice.”  (McGee Decl., Exhibit 8.) 

Moving Defendants require that their employees complete an annual ethics and compliance training.  (Declaration of Doug LaFlamme (“LaFlamme Decl.”) ¶ 3.)  Before completing the annual training, employees must certify that they have access to the HR policies available on the Intranet site and acknowledge that they are responsible for reading and abiding by the policies and procedures listed therein.  (See LaFlamme Decl. ¶10, Exhibits A-I.)  Plaintiff completed this annual training each year between 2007 and 2021.  (LaFlamme Decl. ¶ 11.) 

Moving Defendants updated their arbitration policy on January 1, 2006, September 17, 2007, February 14, 2013, January 22, 2014, and September 28, 2016.  (McGee Decl. ¶ 15, Exhibits 16-21.)  The currently operative version of the arbitration policy includes a provision stating, “The Arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this policy, including but not limited to any claim that all or any part of this policy is void or voidable.”  (McGee Decl., Exhibit 21.)[1] 

            Plaintiff contends that the evidence submitted with the Motion is insufficient to demonstrate that a contractual agreement to arbitrate was formed.  Plaintiff declares that when he signed his offer letter, he had not been provided with an Arbitration Agreement and did not yet have access to Moving Defendants’ intranet page.  (See Declaration of Gregory Antoniono (“Antoniono Decl.”) ¶¶ 6-7.)  Plaintiff further declares that he was not provided with a physical copy of any arbitration agreement and that he did not sign an arbitration agreement during his employment.  (Antoniono Decl. ¶ 8.) 

Contract Formation

Courts presume that the parties intend courts, not arbitrators, to decide disputes about arbitrability, such as whether the parties are bound by a given arbitration clause, or whether an arbitration clause in a concededly binding contract applies to a particular type of controversy.  (Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 891.)  Parties can, however, agree to arbitrate “gateway” questions of arbitrability, such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.  (Id.)  When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally should apply ordinary state-law principles that govern the formation of contracts.  (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 764.)  An arbitration agreement is governed by contract law.  (Id.)  It is construed like other contracts to give effect to the intention of the parties and the ordinary rules of contract interpretation apply.  (Id.)  Id.) IdfsdfIf the contractual language is clear and explicit, it governs.  (Id.)

An essential element of any contract is the consent of the parties, or mutual assent.  (Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 788 (“Esparza”).)  Further, the consent of the parties to a contract must be communicated by each party to the other.  (Id.)  Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.  (Id.) 

Here, although the arbitration policy includes a delegation clause, because Plaintiff disputes that any contract was entered into, the Court will consider the threshold issue of whether Plaintiff agreed to enter into a contract providing for binding arbitration.

Plaintiff argues that the issue of arbitrability is analogous to the facts presented in Esparza.  In Esparza, the appellate court found that an arbitration provision contained in an employee handbook was not enforceable despite the fact that the plaintiff had signed a policy acknowledgment acknowledging receipt of the handbook, where the policy acknowledgement suggested that the acknowledgement was informational and included language indicating that the employee had not yet read the handbook.  (See Esparza, supra, 2 Cal.App.5th at 789-90.) 

The acknowledgment form the employee signed in Esparza stated:

“This handbook is designed to provide information to employees of Sand & Sea, Inc. (Shore Hotel) regarding various policies, practices and procedures that apply to them including our Arbitration Agreement. Shore Hotel and its employees acknowledge that their relationship is ‘at will’ and that either party can terminate that relationship at any time for any reason. Shore Hotel reserves the right to modify, alter or eliminate any and all of the policies and procedures set forth herein at any time, for any reason, with or without notice. Neither this manual nor its contents constitute, in whole or in part, either an express or implied contract of employment with Shore Hotel or any employee.

While this handbook is not intended to state all of the conditions of employment and all of the principles which help to guide our people in the performance of their duties, it will give you general information in regard to certain policies and benefits related to your employment.

I acknowledge that I have received Sand & Sea Inc.'s (Shore Hotel) Employee Handbook. I also acknowledge that I am expected to have read the Employee Handbook in its entirety no longer after one week after receiving it, and that I have been given ample opportunity to ask any questions I have pertaining to the contents of the employee handbook. I also understand that this Handbook is Company property and that it must be returned upon termination of my employment. I understand that failure to abide by these provisions may result in disciplinary action up to and including the termination of my employment.”  (Id. at 485.)

In addition to finding that the employee could not have agreed to the terms of the employer’s arbitration agreement since the signed acknowledgement suggested that the employee had not yet read her employer’s policy, the appellate court also found that the evidence that the employee began working within a week of signing the acknowledgement form was not an implicit agreement to the arbitration provision because absent a clear agreement to submit disputes to arbitration, courts will not infer that the right to a jury trial has been waived.  (See id. at 790.)

The Court agrees that under Esparza, Moving Defendants have not demonstrated that Plaintiff assented to submit his claims to binding arbitration as a condition of his employment.  Here, as in Esparza, the initial form acknowledging receipt of the Handbook includes language suggesting that Plaintiff had not yet read its terms.  Moreover, the homepage of the online Handbook includes language stating that the policies stated therein do not create legal obligations between Moving Defendants and their employees.  (See McGee Decl., Exhibit 8.)  The evidence that Plaintiff acknowledged that he was required to read and abide by Moving Defendants' HR policies is also insufficient to demonstrate he agreed to arbitrate claims related to his employment, since none of the training certifications expressly provide that Plaintiff assented to an arbitration policy and the homepage of the online Handbook states that the policies do not create legal obligations.

In light of the foregoing, the Court DENIES the Motion.  The stay that the Court imposed on March 6, 2023 is lifted.

Moving party is ordered to give notice of this ruling.           

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person.  The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.  This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

           Dated this 16th day of March 2023