More often than not, California employers ask their employees to sign arbitration agreements. The arbitration agreement typically states that any disputes between the employee and employer will be resolved by private arbitration, rather than a California court. These agreements appear in offer letters, proprietary information agreements, and other documents provided to employees during onboarding.
As remote work becomes more prevalent, employers now utilize electronic arbitration agreements. New hires are asked to sign and return arbitration agreements via Docusign or other electronic signature services. Employees often login to an online portal where they can review and electronically sign onboarding documents. Sometimes employers even utilize forms and checkboxes to streamline the process. Thus, with the click of a few buttons, an employer can have a signed arbitration agreement.
But what happens when an employee who is suing their employer claims they did not sign, or have no recollection of signing, the agreement? Despite the relative ease of electronic arbitration agreements, proving the existence of the agreement is not easy. If an employee disputes the existence of an agreement in court, the employer has the burden to prove the existence of the agreement by a preponderance of evidence.
On a motion to compel arbitration, general principles of contract law dictate whether the parties have entered a binding agreement to arbitrate. California courts have set forth a three-step process for these types of disputes. Gamboa v. Northeast Community Clinic (2021) 72 Cal. App. 5th 158, 164-166. First, the employer must provide prima facie evidence of a written agreement to arbitrate. The employer can meet its initial burden by attaching to the motion a copy of the arbitration agreement purporting to bear the opposing party’s electronic signature or by setting forth the agreement’s provisions in the motion.
Second, if the employee disputes the agreement, the employee must provide evidence challenging the authenticity of the agreement. Gamboa, supra, 72 Cal. App. 5th at 164. For example, the employee can file a declaration stating that they do not recall seeing or signing the agreement, which is sufficient under the standard. The employee can also state that they never electronically signed, clicked “I agree,” or marked a checkbox on the agreement. The employee might also provide information about the onboarding process, whether they have a record of the arbitration agreement, whether the arbitration agreement or other documents they signed during the onboarding process contained a proof of signature page, and the employee’s custom or practice in agreeing to arbitration.
Third, if the employee provides sufficient evidence challenging the authenticity of the agreement, the employer must establish with admissible evidence that a valid arbitration agreement exists between the parties. The arbitration agreement, and any signatures, must be authenticated under the California Evidence Code. See Evid. Code § 1400 (“Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.”). Under California Civil Code § 1633.9(a), an electronic signature is attributable to a person only if can be shown that it was “the act of the person.”
The fact that an arbitration agreement purports to bear an employee’s electronic signature or a marked checkbox is not in itself sufficient for authentication. The employer must provide evidence about the security protocols and process used to verify the employee’s electronic agreement, including:
- Who sent the employee the agreement;
- How the agreement was sent to the party;
- Who received the signed agreement;
- How the electronic signature or checkbox was placed on the agreement;
- How the signed agreement was returned; and
- How the employee’s identification was verified as the person who actually signed or marked the checkbox on the agreement
See Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1068. A declaration with this information must also be based on personal knowledge, which may be difficult to obtain if the agreement was signed using a third-party professional employer organization (PEO).
In addition, an employer cannot rely on a declaration from an HR representative that summarily asserts that the employee electronically signed the agreement. The representative must explain:
- how or on what basis they concluded that the electronic signature or marked checkbox was “the act of” the employee;
- that the date and time printed on the agreement was accurate;
- that the signature or checkbox could only have been placed on the agreement by a person using the plaintiff-employee’s unique identification number and password; and
- that the agreement was therefore signed by the plaintiff.
See Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 838-844. If the employer is not able to furnish all of this information, it may be required to litigate the employee’s claims in court.
California employers should proceed with caution before asking their employees to electronically sign an arbitration agreement. In addition, employees should keep a record of all documents that were provided to them during their onboarding, and whether or not they signed them.
About the Author:
Evan Ettinghoff is an associate at Minnis & Smallets where he represents employees in all aspects of employment cases. He has litigated numerous employment cases involving claims of harassment, discrimination, and wrongful termination. Along with Sonya Smallets and Emily Nugent, Evan was named SFTLA’s Trial Lawyer of the Year for 2021 after winning one of the highest emotional distress awards in a sexual harassment case in the Northern District of California.
