Judge: Lon F. Hurwitz, Case: 2022-01241473, Date: 2022-12-02 Tentative Ruling

1. Motion to Compel Arbitration

2. Status Conference

RULING:

Defendant’s Motion to Compel Arbitration and Stay the Action is DENIED. Defendant has not met its burden of proof to establish a valid agreement to arbitrate exists.

Initially, it should be recognized that a basic premise of any arbitration agreement is that it is, at its core, a contract; and, as such, requires that the basic elements of a contract be present to establish its formation. Here, the proposed contract (the proposed arbitration agreement) is a 3 page part of the 36 page Employee Handbook, and contains its own signature page which states, at page 36:

        My signature below attests to the fact that I have read, understand, and agree to be legally bound to 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.

          Do not sign until you have read the above acknowledgement and agreement.

______________________                        __________________________  Print Full Name                                        Signature

______________________

Date

This page 36 is unsigned. Instead, Moving Party offers a separate electronic signature page with the heading “Employee Handbook”, containing instructions to “…read and sign off on the Employee Handbook attached below.” An electronic signature then appears, below which is printed the words “Acknowledged By: Sara Maul”, with an indicated IP number and an “Acknowledged Date”.

Separate and apart from Plaintiff’s assertion that the subject electronic signature is suspect because it differs from the other signature that appears barely 2 minutes later with another acknowledgement (“On Duty and Off Duty Meal Period Agreement”), the Court’s initial question must be: Can a Party be legally bound by “Acknowledging” receipt of a proposed contract?  Clearly, the answer is “No”. There is nothing on page 36 to indicate that Plaintiff was entering into this proposed agreement/contract. No initial. No signature. And “Acknowledging” the Employee Handbook cannot create an obligation to be contractually and legally bound by the terms of a proposed contract contained therein.  

Additionally, the separate electronic signature page shows Plaintiff read and signed for an Employee Handbook Acknowledgement, not an arbitration agreement.

The Employee Handbook itself (ROA 29, Wang Decl. Ex. B) does not attempt to differentiate the arbitration agreement from the remainder of the handbook. In Harris v. TAP Worldwide, LLC, the court found that the employee had agreed to arbitrate because the table of contents had a subject heading of “BINDING ARBITRATION OF CLAIMS” in all caps, the obligation to arbitrate within the handbook itself was in bold underscored letters, it also expressly referred the employee to a separate Agreement to Arbitrate and an Appendix explaining the Company’s policy on arbitration. The appendix further stated that failure to sign the separate arbitration agreement constituted consent, as agreement to the arbitration policy was an “absolute prerequisite” to both hiring and continued employment. (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 383.)

The agreement here is distinguishable from Harris. The arbitration agreement is not specifically called out in the Table of Contents or in the agreement itself. Further, the agreement is combined with two other acknowledgements—an at-will acknowledgement and the acknowledgment of the handbook itself. The arbitration portion of the handbook looks exactly the same as every other portion of the handbook. Also, there is no language indicating a failure to sign deems an employee to have consented. Finally, Section 1.6 titled “Message to Employees” states the Handbook is intended to be a “helpful guide.”

There is no binding arbitration agreement and arbitration cannot be compelled. Therefore, the motion is denied.

Plaintiff to give notice.