90 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com Inadequate electronic signature. The Court of Appeal has upheld a refusal to compel arbitration on the ground that the employer failed to prove that the employee’s electronic signature on the arbitration agreement was authentic. The Court of Appeal relied on the technicality that the employer, in the declaration supporting its petition to compel arbitration, had failed to state sufficient facts regarding the employer’s electronic system to show reasons for believing that the electronic signature was in fact the act of the employee.89 There have been increasing challenges to electronic signatures in arbitration agreements. Inadequate CBA provision. In the context of a collective bargaining agreement, the Court of Appeal has held that a CBA did not require arbitration of Labor Code claims for unprovided meal and rest breaks and for unpaid wages where the employer could not show that the CBA had a “clear and unmistakable waiver of a judicial forum,” which, the Court of Appeal said, must “specify the statutes for which claims of violation will be subject to arbitration.” The employer’s petition to compel arbitration was thus properly denied because the CBA in question lacked that specific language.90 Contract read to provide worst possible result for the employer. In a 2020 judicial switcheroo, the trial court granted the employer’s petition to compel a class action plaintiff to arbitrate his individual claims only, but the Court of Appeal rendered a surprising result by ordering that the plaintiff could pursue his class claims in arbitration—the worst outcome imaginable for the employer. The Court of Appeal accepted the plaintiff’s argument although he had waived the right to present his class claims in court, he did not waive the right to submit the class claims in arbitration. The Court of Appeal held that, whether or not that was the employer’s subjective intent, the arbitration agreement unambiguously provided for arbitration of class claims.91 Effect of employee repudiation. In a 2019 split decision, the Court of Appeal departed from the deep-seated reluctance to find employee consent to an arbitration agreement. In that case an at-will employee refused to sign an arbitration agreement but was nonetheless bound by it after the employer expressly told her that arbitration was a condition of employment that she would accept by continuing her employment. A dissenting opinion argued that the Court of Appeal should have affirmed the trial court’s finding that no actual consent occurred in light of the employee’s express repudiation of the agreement.92 In a 2020 decision, the Court of Appeal applied to an arbitration agreement the general rule that a minor can disaffirm a contract into which she has entered, “within a reasonable time” after she reaches the age of majority. The plaintiff, bringing a FEHA claim for sexual harassment, had signed an arbitration agreement at age 16 and had continued to work for the employer for four months after reaching her 18th birthday. She then resigned and waited another four months to sue. The trial court, affirmed by the Court of Appeal, held that this eight-month delay after reaching age 18 was “reasonable.” The Court of Appeal, rejecting the employer’s argument that the plaintiff had ratified the arbitration agreement by continuing to work for the employer for four months after reaching the age of majority, noted evidence indicating that the plaintiff remained unaware of the significance of the arbitration agreement when and after she signed it. And the trial court acted within its discretion in finding that the plaintiff’s decision to disaffirm the agreement within eight months of reaching her age of majority was acting within a “reasonable time.”93 Limiting scope of consent. In 2020, the Court of Appeal considered an arbitration agreement between the plaintiff and his former employer, a car dealership. At issue was whether this agreement applied to the plaintiff’s lawsuit against his next employer, which was a closely affiliated car dealership. The Court of Appeal upheld the trial court’s refusal to apply the agreement, because the agreement was limited to its actual signatories even though the car dealerships were affiliated. The arbitration agreement failed to expressly state the agreement was for the benefit of any third-party beneficiaries.94 This result obtained even the plaintiff’s complaint alleged that all the car dealerships were “joint employers.”95 The trial court also permissibly refused to stay litigation of a PAGA claim:
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