Hand-signed arbitration agreements will be easier for employers to enforce in light of a recent California Court of Appeal ruling. Declarations from former employees claiming they “do not recall” having signed their arbitration agreements are not evidence that they did not sign and do not carry weight in opposing employers’ motions to compel arbitration, according to the ruling. On the other hand, in discussing electronically-signed arbitration agreements, the Court of Appeal did employers no favors.
The case is Iyere v. Wise Auto Group, decided by the First District of the California Court of Appeal on January 19, 2023. In Iyere, two plaintiffs sued their former employer in Superior Court alleging claims for discrimination, harassment, retaliation, etc. Their former employer brought a motion to compel the plaintiffs to submit their claims to arbitration pursuant to their hand-signed arbitration agreements.
In opposition to the motion, each plaintiff submitted a declaration stating, in brief:
– On my first day on the job, defendant gave me a stack of papers to sign. A manager told me to “rush” through the papers and to start working. I was “not given any time to review the documents”;
– I signed the documents in the stack and started work;
– I do not recall an arbitration agreement being among the documents I was given;
– I do not recall signing the arbitration agreement and I “do not know how my signature was placed” on the arbitration agreement.
In bringing a motion to compel arbitration, the Iyere court confirmed, the employer bears the initial burden of proving an arbitration agreement exists. This light burden is satisfied by the employer filing a signed arbitration agreement with the court, as defendant did in Iyere.
The burden then shifts to the former employee plaintiff to put forward admissible evidence that the signature on the agreement is not their signature (or evidence establishing some other defense to enforcement of the agreement). Only if the plaintiff satisfies this burden does it then shift back to the employer to authenticate plaintiff’s signature. (Authentication is the process of proving as required by the Evidence Code that the signature was, in fact, made by the plaintiff.)
The question before the Court of Appeal in Iyere was whether each plaintiff’s declaration stating “I do not recall” signing the arbitration agreement put forward by the employer was sufficient evidence to shift the burden to the employer to authenticate the signature.
The Court of Appeal noted, importantly, that plaintiffs’ declarations did not deny that the signatures on the agreements were theirs and did not deny that plaintiffs had signed the agreements. Instead, each declaration simply stated, “I do not recall signing” the agreement and “I do not know how my signature was placed on” the agreement.
The Court of Appeal then correctly reasoned:
“Although the plaintiffs state they do not recall signing the agreement, there is no conflict between having signed a document on which their handwritten signature appears and, two years later, being unable to recall having done so.” On that basis, the Court of Appeal ruled that plaintiffs had failed to carry their burden to submit evidence that the signatures were not theirs. As a consequence, the employer prevailed on the issue of the authenticity of plaintiffs’ signatures and the Court of Appeal ordered the trial court to grant defendant’s motion to compel arbitration.
In opposing employers’ motions to compel arbitration, plaintiffs very often claim they do not recall having signed the agreement. At least where the arbitration agreement is signed by hand, Iyere is important new authority in overcoming plaintiffs’ oppositions to such motions and holding former employees to their promise to arbitrate.
Electronic Signatures – A Different Result
The court came to a different conclusion concerning electronically signed arbitration agreements. In the case of e-signed arbitration agreements, the court wrote that a plaintiff’s declaration stating they do not recall signing does serve as evidence that the electronic signature was not made by the plaintiff. In the Court of Appeal’s opinion, while it is reasonable to expect a person to be able to recognize their handwritten signature, a person “cannot confirm or deny the authenticity of an electronic signature by viewing a computer printout of the person’s name followed by the words ‘(Electronic Signature).’ In such a case, the individual’s inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so.”
As a consequence, in the Iyere court’s opinion, in circumstances where the former employee claims they do not recall electronically signing an arbitration agreement, the burden does then shift to the employer to submit evidence satisfying the rigorous protocol for authenticating electronic signatures.
The Court of Appeal in Iyere highlights a potential advantage for employers of hand-signed arbitration agreements. In fact, having employees sign arbitration agreements by hand, instead of electronically, may be worth considering, particularly for employers who are not confident they will continue to employ IT staff who are able to explain the company’s e-signature system in the detail necessary to authenticate an employee’s electronic signature.
If you have questions or we may assist on this subject, please contact your Fox Rothschild LLP attorney or the author.
This post provides general information and does not constitute legal advice to any person with respect to any circumstance. This post does not create an attorney-client relationship with any person.