Judge Ralph C. Hofer, Case Number: 23GDCV00990, Date: 2024-01-19 Tentative Ruling

Plaintiff Olivia Klayman brings this action against her former employer, defendant Systech Solutions, LLC, alleging that in July of 2020, plaintiff was hired as a Marketing and Corporate Communications Analyst, and was wrongly classified as an exempt employee and paid an annual salary, when her employment position did not fall under any exception to the non-exempt employee status. Plaintiff alleges that due to this misclassification, plaintiff was denied overtime that she was legally entitled to, as well as regular meal and rest periods. Plaintiff also alleges that defendant failed to provide plaintiff with code-compliant wage statements, and that plaintiff was made to use various personal items for defendant’s business, such as plaintiff’s computer, cell phone and internet while plaintiff was working remotely, for which expenses plaintiff was not reimbursed.

Plaintiff also alleges that on multiple occasions throughout her employment, plaintiff was subjected to discrimination on the basis of her gender, race and religion, as plaintiff was the only Caucasian Jewish female at Systech, and the only female employed by Systech that had no familial relationship to an officer of the company. Plaintiff alleges that she was not part of the team because she was not of Indian descent as were the majority of defendant’s employees. Plaintiff alleges that ultimately, in October of 2022, despite having been praised the previous week in a quarterly performance review, plaintiff was terminated for pretextual reasons, and was terminated due to her gender, race and religion. Plaintiff also alleges that plaintiff has requested her personnel and payroll records in accordance with the Labor Code, but defendant has failed to comply with plaintiff’s request.

“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 if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

Under the Federal Arbitration Act, arbitration agreements “shall be valid, irrevocable and enforceable, save upon such grounds that exist at law or in equity for the revocation of a contract.” 9 U.S.C. section 2.

Generally, there is a strong public policy in favor of arbitration of disputes and any doubts concerning the scope of arbitrable disputes should be resolved in favor of arbitration. Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9. The determination of arbitrability is a legal question subject to de novo review. An appellate court will uphold the trial court's resolution of disputed facts if supported by substantial evidence. Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267.

In general, the party seeking arbitration bears the burden of proving the existence of an arbitration agreement by a preponderance of the evidence. Villacreses v. Molinari (2005) 132 Cal.App.4th 1223, 1230:

“In determining whether an enforceable arbitration agreement exists, the initial burden is on the party petitioning to compel arbitration. “Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 413; see Engalla v. Permanente Medical Group (1997) 15 Cal.4th 951, 972 [64 Cal. Rptr. 2d 843, 938 P.2d 903].) Once the petitioner has met that burden, the burden shifts to the party opposing arbitration, to “produc[e] evidence of, and prov[e] by a preponderance of the evidence, any fact necessary to the defense.” (Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 413.”

Under federal law as well, the moving party to compel enforcement of an arbitration agreement bears the burden of establishing the existence of a valid agreement to arbitrate and that the agreement encompasses the dispute at issue, while the opposing party bears the party of establishing any defenses to enforceability. Sanfilippo v. Tinder, Inc. (C.D. Cal. 2018) 2018 WL 6681197.

“Any disputes between the Parties will be resolved by binding arbitration, as set forth in Systech’s attached Arbitration of Disputes Policy (‘Policy’). The Parties agree to comply with each provision of the Policy.”

Plaintiff in opposition argues that plaintiff did not in fact sign the agreement submitted with the motion, and first saw the document when it was shown to plaintiff by counsel during this litigation. Plaintiff points out that defendant has failed to produce the alleged email from July 7, 2020 by which defendant claims that plaintiff transmitted a signed copy of the agreement, as the only email submitted makes no reference to arbitration and does not include the alleged agreement. [Srinivasan Decl., Ex. C]. Plaintiff submits her own declaration in which she states that she did not sign the agreement, and also explains that the electronic signature which appears on the agreement did not exist as of the date the agreement was purportedly signed, but was created by plaintiff months later.

“3. On July 8, 2020, I went to the Systech office in Glendale, California because I was told to come in for an orientation for my first day. On this date, I met with Arun Gollapudi, who went over the company structure. Specifically, he wrote out everyone’s names on a whiteboard and explained their roles to me. Afterwards, I met with my co-worker Shilpa Gollapudi. Shilpa taught me how to use the timekeeping system. Then, Shilpa and I began a work assignment where we worked on editing the company website….

5. On July 8, 2020, I spent approximately thirty minutes in total with Sureshkumar Srinivasan during which he mostly discussed his background. I have no recollection of him handing me any hard copy documents on this date, or ever, and have no reason to believe that hard copy documents were provided. I do not have any recollection of reviewing or signing any arbitration agreement with Systech Solutions, Inc, and I have no reason to believe that any such agreement was signed. Nor did I ever receive or review an employee handbook. The only tangible item that I was given on my first day of work was a keycard to access the office. To my best recollection, Arun Gollapudi gave me the keycard.

6. The first time I saw the arbitration agreement that Systech Solutions, Inc. claims I signed was in the summer of 2023, when my counsel presented it to me. Based on my review of Systech’s Motion to Compel Arbitration and supporting documents, I know that Systech claims that I signed an arbitration agreement on July 7, 2020 and transmitted a copy of it to Systech via e-mail on that date. However, Systech’s motion has no evidence of any such e-mail, and I found no such e-mail when conducting a thorough search of my e-mails exchanged with Systech.

7. The signature on the arbitration agreement presented by Systech was an electronic signature that I first created on my MacBook Pro, which I purchased on September 14, 2020 in order to produce better work product at Systech Solutions, Inc. I used the same signature, which I created on the MacBook Pro purchased in September 2020, to sign off on my termination documents with Systech Solutions, Inc. This signature – i.e., the one that is seen on the arbitration agreement presented by Systech – did not exist in July of 2020. Attached hereto as Exhibit 21 is a true and correct copy of the charge for the MacBook Pro from my credit card statement.”

Plaintiff also submits deposition testimony of the defendant’s Vice President of Global Operations, Srinivasan, who admitted that the July 7th email which was produced in this matter did not include an arbitration agreement, and that a copy including the agreement had not been produced. In that testimony, the witness concedes he did not see Klayman sign the agreement but believes that it was signed with a wet signature, and scanned copies were emailed to him, but the witness had no copies. [Ex. 18, Srinivasan Depo. pp. 129-130, 136-137].

Plaintiff argues that while Srinivasan testified that plaintiff used her wet signature to sign the Agreement, it is clear that the signature seen on the arbitration agreement is the same electronic signature used on all documents produced by defendant, including two small dots under the letter “Y” in Klayman’s last name, which Klayman states she first created using the “Preview” application on a laptop she bought in September 2020, well after defendant claims that the arbitration agreement was signed. [Klayman Decl., para. 7].

Defendant with the reply submits for the first time a copy of an email purportedly sent from plaintiff’s computer on July 7, 2020 showing that there had been attached PDF documents, as well as purported copies of those documents, with the same electronic signature on each document purportedly signed and transmitted that date. [Supplemental Srinivasan Decl., paras. 3-7, Exs. M-O].

Plaintiff has filed objections to the supplemental declaration, arguing that this evidence should not be considered as submitted for the first time with the reply papers. Plaintiff argues that before this evidence is considered plaintiff requests that the parties resume declarant’s deposition as it was previously agreed would be done if new documents were discovered and permit supplemental briefing.

The court will grant a brief continuance to permit a further deposition in this matter of the witness Sureshkumar Srinivasan to address the documentation submitted for the first time with the reply papers. The court will hear arguments concerning whether any other discovery will be required to address the central issue raised by the motion, in effect, whether plaintiff in fact agreed to the arbitration agreement.

Defendant Systech Solutions, Inc.’s Motion to Compel Arbitration and Stay Action is CONTINUED to March 15, 2024 at 9:00 a.m. for further deposition of defendant’s witness Sureshkumar Srinivasan concerning the subjects raised in the Supplemental Declaration of Sureshkumar Srinivasan, filed in this matter on January 11, 2024, and for supplemental briefing. Supplemental opposition and reply to be filed and served according to Code based on the new hearing date. The continued deposition of Suresh Kumar Srinivasan must be completed by no later than February 9, 2024.

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