By: Kerri N. Kramer and Francesca Gonzales
A recent appellate decision regarding the enforcement of arbitration agreements has been published by the California Fifth District Court of Appeal. Ramirez v. Golden Queen Mining Co., LLC addressed the standard necessary for an employee to submit evidence disputing the authenticity of an arbitration agreement that the employer says they signed as part of a motion to compel arbitration. Ramirez v. Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 825 (Ramirez). It is the latest case to push back on earlier cases that accepted employees’ bare statements that they do not remember signing the agreement presented. The decision says that, at the very least, the employee has to affirmatively deny that the handwritten signature is theirs if they want to create a dispute. At that point, the employer still has the right to introduce evidence countering that claim. While employers should still take care to ensure that they can affirmatively prove the authenticity of their arbitration agreements, this is a good decision to have in any employer’s arsenal for compelling arbitration in the future.
In Ramirez, the trial court denied an employer’s motion compel an employee’s claims to arbitration on the ground that the employer did not prove the existence of an executed arbitration agreement. The denial was based on the employee’s statement, made in opposition to the motion, that he did not recall being presented with or signing an arbitration agreement.
On appeal, the employer asserted that these statements were not sufficient to rebut its initial showing that a written arbitration agreement existed and that the employee’s statements did not create a factual dispute about the authenticity of a handwritten signature. The Court of Appeal agreed, noting that an individual is able to recognize their own handwritten signature, so their inability to remember signing the document – without disputing the actual signature – does not create a dispute about the authenticity of the signature.
Burden Shifting Framework
This case illustrates the burden-shifting framework under which trial courts determine whether an arbitration agreement exists in ruling on motions or petitions to compel arbitration. This is a three-step process that proceeds as follows:
1. Step One: The party seeking to compel arbitration must present prima facie evidence of a written arbitration agreement.
A party seeking arbitration can also make an initial showing by attaching a copy of the arbitration agreement allegedly signed by the opposing party.
In Ramirez, the employer’s motion to compel arbitration was supported with the declaration of its human resources manager, which attached copies of the arbitration agreement, the acknowledgement of the arbitration agreement signed by the employee, and other documents signed by the employee.
The arbitration provision itself did not contain a separate signature block and was not signed or initialed. The “Handbook Acknowledgement,” which contained the arbitration provision, included the handwritten signature of the employee certifying that he understood and voluntarily agreed to the terms of the Company Arbitration Agreement.
The trial court concluded that the employer made a prima facie showing of an existing written arbitration agreement, satisfying the first step of the process and shifting the burden back to the employee to dispute this evidence.
2. Step Two: If the first step is satisfied, the party opposing arbitration has the burden to produce evidence that challenges the authenticity of the agreement.
When the burden shifts to the arbitration opponent, they must “identify a factual dispute as to the agreement’s existence and must present admissible evidence to support the existence of that factual dispute.”
There is a split of authority among the California Courts of Appeal regarding what constitutes sufficient evidence to create a factual dispute about the authenticity of handwritten signatures.
In Gamboa v. Northeast Community Clinic, (2021) 72 Cal.App.5th 158, 168, the Court of Appeal for the Second District held that it was sufficient that the employee challenged the authenticity of an arbitration agreement by saying that she did not remember it. However, in Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 756, the Court of Appeal for the First District found that an employee stating merely that they do not recall signing the arbitration agreement is insufficient to create a dispute, because there is no conflict between them signing the document with handwritten signatures and being unable to recall signing the document two year later. The court concluded that “if the individual does not deny that the handwritten personal signature is his or her own, that person’s failure to remember signing is of little or no significance.”
Acknowledging the split in authority, the Court of Appeal in Ramirez (for the Fifth District) agreed with Ivere’s conclusion and rationale. The court in Ramirez emphasized that the employee’s declaration did not state that he reviewed the arbitration agreement and the other documents attached to the declaration of his former employer’s human resources manager. The court noted evidentiary procedures for a witness inspecting a writing to refresh their memory and noted that it was an open question whether the employee’s inspection of the documents would have allowed him to recall being presented with the arbitration agreement and related acknowledgement.
The court ultimately found that the employee’s declaration did not address the authenticity of his signatures as it did not state that the signature on the “Handbook Acknowledgement” was not his.
3. Step Three: If the second step is satisfied, the burden returns to the party seeking to compel arbitration to prove, by a preponderance of evidence, that the parties formed a valid contract to arbitrate their dispute.
The Ramirez court concluded that, because the employee failed to produce evidence that challenged the authenticity of the agreement, the burden never shifted back to the employer to rebut the employee’s claim. It was therefore incorrect for the trial court to rule that the employer had not established the existence of the agreement.
The matter was ultimately remanded to the trial court for further proceedings related to other arguments the employee raised about the enforceability of the agreement.
This case should serve as a crucial reminder to employers about the detailed, burden-shifting process required when seeking to enforce signed arbitration agreements. Employers should work with an experienced employment attorney to review their policies surrounding their arbitration agreements, including how they are signed and maintained.
Kerri N. Kramer is a Senior Associate of Kring & Chung, LLP. She can be reached at 949-261-7000 or [email protected]. Francesca Gonzales is a law clerk at the Firm.