Gorlach v. Sports Club Co.
--- Cal.Rptr.3d ----, 2012 WL 4882328
Cal.App. 2 Dist.,2012.
October 16, 2012
SUZUKAWA, J.
*1
Defendants The Sports Club Company and five of its officers appeal an order denying a motion to compel arbitration.FN1 We conclude that the trial court properly denied the motion to compel, and thus we affirm.
STATEMENT OF FACTS
Susan Gorlach is the former human resources director for Sports Club. She resigned her position on August 6, 2010.
Prior to 2010, there were no arbitration agreements between Sports Club and its employees (or “team members”). In 2010, Sports Club
revised its “Team Member Handbook” (handbook) to include an arbitration
agreement. The revisions relevant to this appeal are as follows:
(1)
On page 31, the handbook states: “As a condition to employment, all
Team Members must sign the Mutual Agreement to Arbitrate Claims found in
Appendix 4.”
(2) Appendix 4, “Mutual Agreement to Arbitrate Claims,” states in relevant part: “The Sports Club
Company, Inc. (‘Company’) and I agree to the resolution by arbitration
of all claims, disputes, and/or controversies (collectively ‘claims'),
whether or not arising out of my employment (or its termination), that
the Company may have against me or that I may have against the Company
or against its partners, owners, employees or agents, in their capacity
as such or otherwise.” It concludes: “I acknowledge that I have
carefully read this Agreement, that I understand its terms, that all
understandings and agreements between the Company and me relating to the
subjects covered in the Agreement are contained in it, and that I have
entered into the Agreement voluntarily and not in reliance on any
promises or representations by the Company other than those contained in
this Agreement itself. I understand that by entering into this
Agreement, the Company and I have both waived our right to a jury trial
and our right to appeal with respect to all claims covered by this
Agreement.”
Gorlach was tasked with presenting the new handbook to all Sports Club
employees and collecting their signatures to the arbitration agreement.
She began conducting general meetings about the handbook and collecting
employee signatures the week of June 14, 2010.
On June 30, 2010, Gorlach
told Chief Operating Officer April Morgan that all corporate employees
except four had signed the arbitration agreement, but she did not
identify herself as one of the employees who had not signed. She also
told Morgan that 254 of the 256 employees who had attended the general
meetings signed all signature pages of the handbook, but that 164
employees had not yet attended meetings. Gorlach said she would resume “make up” meetings the week of July 11, 2010. On July 21, 2010, she informed the Sports Club's group exercise team that she would like their signatures by July 23, 2010.
Throughout June and July 2010, Gorlach led Sports Club executives to believe that she had signed the arbitration agreement, although she had not. On July 30, 2010, Gorlach sent an email to four Sports Club
executives, which addressed the need to “continue to think about how
we're going to proceed when an active team member does not sign the
Arbitration Agreement.” The email continued: “From our ‘Legal Update’
meeting, I realize this has been an important question and potential
direction for SCC [ (Sports Club
Company) ]; therefore, I wanted to give you an update. Those who have
not signed are inquiring about what it means to his or her status as a
team member of SCC. As per our meetings, I'm giving them time to seek
counsel prior to signing to prevent any forced agreement and since it's
not an implied agreement. Additionally, it appears that Natania Goldberg
has not signed just yet amongst others.... Leanne will be conducting
the presentations in New York the week of August 9th while I help fill
in for Karol since he'll be on vacation.”
*2
Gorlach resigned her position with Sports Club on August 6, 2010. It is undisputed that she never signed the arbitration agreement.
STATEMENT OF THE CASE
Gorlach filed a complaint against Sports Club and five of its officers on January 7, 2011.FN2
The complaint alleged causes of action for wrongful termination,
retaliation, paramour sexual harassment, intentional infliction of
emotional distress, defamation, breach of contract, and negligence.
Sports Club
answered the complaint on February 23, 2011, generally denying the
complaint's allegations and asserting 26 affirmative defenses. In its
twenty-second affirmative defense, Sports Club
asserted that the court lacked jurisdiction to resolve the dispute “due
to the existence of a mandatory, binding arbitration agreement that
Plaintiff agreed to be bound by.”
I. Motion to Compel Arbitration
On April 15, 2011, Sports Club moved to compel arbitration. The motion asserted that although Gorlach did not sign the arbitration agreement, she assented to it by her continued employment with Sports Club. In support of the motion to compel arbitration, Sports Club submitted the following declarations:
Declaration of Jeff Peters. Peters is the general manager of the
Sport Club's West Los Angeles fitness club. On May 11, 2010, he attended
a quarterly manager's meeting, at which Gorlach presented updates to the handbook. Gorlach emphasized that among the updates was a new arbitration agreement. Gorlach said Sports Club
expected each team member to sign the arbitration agreement as a
condition of employment. She provided each team member with a copy of
the arbitration agreement so that each could sign it and hand it in at
the end of the presentation.
Declaration of Nanette Francini. Francini is Sports Club's president and co-founder. On June 14, 2010, she attended Gorlach's presentation of the handbook at the company's corporate offices. Gorlach
emphasized that the handbook contained an arbitration agreement and
that signing the agreement was a condition of employment. On about June
15, 2010, Francini asked Gorlach whether all Sports Club employees had signed the arbitration agreement. Gorlach responded “that everyone but four individuals had signed the Agreement.” Because Gorlach
did not identify herself as one of these four individuals, Francini
believed she had signed the agreement. On about July 7, 2010, Francini
asked Gorlach whether everyone on the executive committee, which included Gorlach, had signed the agreement. She said that they had. Gorlach never told Francini that she did not want to sign the agreement or that the agreement did not apply to her.
Declaration of Rex Licklider. Licklider is Sports Club's chief executive officer. He was not able to attend Gorlach's presentation of the handbook at the corporate offices on June 14, 2010. Subsequently, Gorlach
told him that all corporate office employees had signed the handbook
and arbitration agreement except Tim O'Brian and himself; Licklider
immediately signed it. Shortly thereafter, Licklider asked Gorlach
if all corporate team members had signed the handbook and arbitration
agreement; she replied that “everyone at corporate” had signed the
handbook and arbitration agreement. Licklider understood this to mean
that plaintiff had signed the arbitration agreement because she was a
member of “corporate.” Gorlach never told Licklider that she did not want to sign the arbitration agreement.
*3
Declaration of April Morgan. Morgan is Sport's Club's chief operating officer. Gorlach was responsible for updating the handbook, which last had been updated in 2002 and did not contain an arbitration agreement. Gorlach
began updating the handbook in the summer of 2008. The major update to
the handbook was the addition of an arbitration agreement, which is
appendix 4 to the handbook. The arbitration agreement was also
referenced within the handbook. Signing the agreement is a condition of
employment with Sports Club.
Gorlach
was tasked with presenting and distributing the new handbook and
ensuring that each employee signed each applicable signature page. Gorlach was also to maintain all of the employees' signature pages, including the arbitration agreement's signature pages. Gorlach began presenting the handbook to Sports Club
employees on June 14, 2010. She made 26 presentations of the handbook
to employees over the next four days. If employees did not sign the
arbitration agreement at the presentations, Gorlach would follow up with them and attempt to obtain their signatures.
On June 30, 2010, Gorlach
stated that all corporate employees except for four had signed the
arbitration agreement. She did not identify herself as an employee who
had not signed the arbitration agreement. Further, she said that 254 of
the 256 employees who had attended the presentations signed all
signature pages of the handbook, but that 164 employees had not yet
attended presentations. She said she would resume “make up”
presentations the week of July 11, 2010.
On July 30, 2010, Gorlach sent an email saying that some Sports Club employees did not want to sign the arbitration agreement and were seeking advice on how to proceed.
II. Opposition to Motion to Compel Arbitration
Gorlach
opposed the motion to compel arbitration. She noted that she did not
sign the arbitration agreement, and thus she urged there was no
enforceable arbitration agreement between her and Sports Club. She further contended that the arbitration agreement was procedurally and substantively unconscionable, and Sports Club had waived its right to compel arbitration by taking steps inconsistent with an intent to invoke arbitration.
In support of her opposition, Gorlach declared that Sports Club did not ask its employees to sign an arbitration agreement until 2010, at which time she declined to sign the agreement.
III. Reply to Motion to Compel Arbitration
Sports Club contended that even though Gorlach did not sign the arbitration agreement, she is bound by it as a matter of law because she continued to work for Sports Club
after learning that signing the agreement was a condition of
employment. The arbitration agreement thus was an implied-in-fact
contract between Gorlach and Sports Club. Further, Gorlach is estopped from claiming the arbitration agreement does not apply to her because she deliberately misled Sports Club into believing that she signed it, and Sports Club relied on her misrepresentations to its detriment. Sports Club
also contended that it did not through its conduct waive the
arbitration agreement, and the agreement is neither substantively nor
procedurally unconscionable.
IV. Order Denying Motion to Compel
*4
The
court denied the motion to compel on June 1, 2011, finding that
“defendants have failed to demonstrate that there exists a written
arbitration agreement between the plaintiff and defendants.” The court
agreed that Gorlach had led Sports Club to believe she had signed the arbitration agreement, but noted that when Gorlach
resigned, she was still in the process of collecting signatures: “We're
talking about a period of time in which—if this had gone on—we would
have been into a bunch of different case law here if this had gone on
for months under their noses and they hadn't known it or something, it
would have been a whole different deal. It's clear from the declarations
that all the signatures weren't in yet.” The court noted, moreover,
that just seven days before Gorlach
resigned, she advised the chief operating officer that some employees
still had not signed the arbitration agreement and were “inquiring about
what it means to his or her status.” Thus, the court said, “It sounds
like by reading this that it was still in its rollout condition.... It
sounds like it was still in the rollout condition and everyone hadn't
signed it yet, including her. She made a choice not to sign it.”
The
court concluded: “[B]y her responses, did she make omissions which
intentionally misled the [chief operating officer] and [chief executive
officer] to believe that she was on board and she said she had signed? I
think that she did. But at the same time, ... [s]he quit before she
signed it. There is no signed agreement. She clearly didn't want to go
to arbitration. There's just no question based on everything that I read
that she said she was never planning on signing this.”
DISCUSSION
[1] [2] [3] [4] Code of Civil Procedure section 1281.2
provides in relevant part: “On petition of a party to an arbitration
agreement alleging the existence of a written agreement to arbitrate a
controversy and that a party thereto refuses to arbitrate such
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.” “ ‘[T]he right to arbitration depends
upon contract; a petition to compel arbitration is simply a suit in
equity seeking specific performance of that contract. [Citations.]’ (
Engineers & Architects Assn. v. Community Development Dept. (1994) 30 Cal.App.4th 644, 653 [35 Cal.Rptr.2d 800].) There is no public policy in favor of forcing arbitration of issues the parties have not agreed to arbitrate. (
Ibid.) It follows that when presented with a petition to
compel arbitration, the trial court's first task is to determine whether
the parties have in fact agreed to arbitrate the dispute. [¶] We apply
general California contract law to determine whether the parties formed a
valid agreement to arbitrate.” (
Marcus & Millichap Real Estate Investment Brokerage Co. v. Hock Investment Co. (1998) 68 Cal.App.4th 83, 88–89, 80 Cal.Rptr.2d 147.)
*5
[5] Ordinarily, we review a denial of a petition to compel arbitration for abuse of discretion. (
California Parking Services, Inc. v. Soboba Band of Luiseno Indians (2011) 197 Cal.App.4th 814, 817, 128 Cal.Rptr.3d 560, citing
Whaley v. Sony Computer Entertainment America, Inc. (2004) 121 Cal.App.4th 479, 484, 17 Cal.Rptr.3d 88.)
However, where the trial court's denial of a petition to arbitrate
presents a pure question of law, we review the order de novo. (
California Parking Services, supra, at p. 817, 128 Cal.Rptr.3d 560, citing
Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419, 1425, 34 Cal.Rptr.3d 547.)
The parties agree that Gorlach never signed a written contract to arbitrate. Sports Club contends, however, that (1) Gorlach
is equitably estopped from contending that the arbitration agreement
does not apply to her, and (2) an implied-in-fact arbitration agreement
exists between Gorlach and Sports Club. We consider these issues below.
I. Gorlach Is Not Equitably Estopped From Denying the Existence of the Arbitration Agreement
Sports Club contends that Gorlach
is equitably estopped from contending that the arbitration agreement
does not apply to her because she deliberately misled the executive
committee into believing she signed the agreement. It notes that Gorlach
told executive committee members Morgan, Licklider, and Francini that
“all of corporate” had signed the agreement, even though she had not.
Further, Sports Club urges that Gorlach's
responsibility for obtaining signatures and maintaining signed
arbitration agreements gave it no practical way to determine that Gorlach had not signed, and Sports Club relied on her representations to its detriment. For the following reasons, we do not agree.
[6] [7]
“ ‘The essence of an estoppel is that one has, by false statements or
conduct, led another to do that which he would not otherwise have done
and as a result the other has suffered injury. [Citation.] The elements
of an estoppel claim are: “(1) the party to be estopped must be apprised
of the facts; (2) he must intend that his conduct shall be acted upon,
or must so act that the party asserting the estoppel had a right to
believe it was so intended; (3) the other party must be ignorant of the
true state of facts; and
(4) he must rely upon the conduct to his injury.” [Citation.]’ ” (
Brown v. Chiang (2011) 198 Cal.App.4th 1203, 1227, 132 Cal.Rptr.3d 48, italics added.) “ ‘The sine qua non of estoppel is that the party claiming it
relied to its detriment on the conduct of the party to be estopped.’ (
Orange County Water Dist. v. Association of Cal. Water etc. Authority (1997) 54 Cal.App.4th 772, 780 [63 Cal.Rptr.2d 182].)” (
Vargas v. City of Salinas (2011) 200 Cal.App.4th 1331, 1342, fn. 8, 134 Cal.Rptr.3d 244, italics added.)
[8]
Estoppel generally is a question of fact. However, where the facts are
undisputed and only one reasonable conclusion can be drawn from them,
whether estoppel applies is a question of law. (
In re Estate of Bonanno (2008) 165 Cal.App.4th 7, 22–23, 80 Cal.Rptr.3d 560.)
[9] In the present case, the trial court concluded there was no evidence that Sports Club relied to its detriment on Gorlach's
implied representations that she had signed the arbitration agreement,
and we agree. All of the evidence before the trial court suggested that
when Gorlach resigned, Sports Club
was still “rolling out” its new handbook and arbitration agreement—that
is, it had not yet completed the process of having its employees sign
the arbitration agreement. Moreover, although Sports Club had advised its employees, including Gorlach, that signing the arbitration agreement was a “condition of employment,” there is no evidence that, as of the date of Gorlach's resignation, Sports Club
had decided what it would do if an employee refused to sign the
arbitration agreement or had terminated any employee for failing to sign
the agreement. Accordingly, there was no evidence from which the trial
court could have concluded that had Sports Club known Gorlach had not signed the arbitration agreement, it would have terminated her prior to August 6, 2010.
*6
Sports Club contends it has been harmed by Gorlach's
implied misrepresentations because it now finds itself “defending a
lawsuit in the very venue [it] sought to avoid by virtue of the
Arbitration Agreement.” Although it is clear that Sports Club would have preferred to litigate this matter in an arbitral setting, it was entitled to do so only if both it
and Gorlach agreed to submit to arbitration. There is no evidence that Gorlach would have agreed to do so, even if refusing to sign risked the loss of her job. Indeed, it appears that Gorlach left her job specifically
in order to avoid signing the arbitration agreement. The issue, therefore, is not whether Sports Club would be better off if Gorlach had signed the arbitration agreement—from its perspective, it undoubtedly would be. The issue, properly framed, is whether Sports Club would have terminated Gorlach
for failing to sign the agreement prior to August 6, 2010—and as to
that issue, as we have said, there is no evidence that it would have.FN3 The trial court therefore properly found that there was no detrimental reliance by Sports Club and, hence, no equitable estoppel.
II. There Is No Implied–In–Fact Arbitration Agreement
[10] Sports Club
contends that even though there is no signed arbitration agreement
between the parties, there is an implied-in-fact agreement to arbitrate
that was created when Gorlach remained in Sports Club's
employ after learning that signing the arbitration agreement was a
condition of employment. It urges that California courts “have
repeatedly upheld unexecuted arbitration agreements by finding that an
implied-in-fact contract existed between the employer[ ] and employee[
]. Implied-in-fact contracts are found in cases with unexecuted
arbitration agreements when (1) employees have knowledge of the
arbitration agreement and (2) employees continue to work after receipt
of the arbitration agreement. In such cases, Courts have held that the
employees' continued employment constitutes their acceptance of the
agreements to arbitrate.” For the following reasons, we do not agree.
[11] [12] Civil Code section 1621
defines an implied contract: “An implied contract is one, the existence
and terms of which are manifested by conduct.” “ ‘An implied contract “
‘... in no less degree than an express contract, must be founded upon
an ascertained agreement of the parties to perform it, the substantial
difference between the two being the mere mode of proof by which they
are to be respectively established.’ ” [Citation.] ... Although an
implied in fact contract may be inferred from the “conduct, situation or
mutual relation of the parties, the very heart of this kind of
agreement is an
intent to promise.” [Citation.]' (
Friedman v. Friedman (1993) 20 Cal.App.4th 876, 887 [24 Cal.Rptr.2d 892], italics added; see also
Truck Ins. Exch. v. Amoco Corp. (1995) 35 Cal.App.4th 814, 824–825 [41 Cal.Rptr.2d 551].)” (
Zenith Ins. Co. v. O'Connor (2007) 148 Cal.App.4th 998, 1010, 55 Cal.Rptr.3d 911.) “Accordingly, a contract implied in fact ‘consists of obligations arising from
a mutual agreement and intent to promise where the agreement and promise have not been expressed in words.’ [Citation.]” (
Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4th 1171, 1178, 134 Cal.Rptr.3d 779, 266 P.3d 287, italics added.)
*7
[13]
California law permits employers to implement policies that may become
unilateral implied-in-fact contracts when employees accept them by
continuing their employment. Whether employment policies create
unilateral contracts is “a factual question in each case.” (
Asmus v. Pacific Bell (2000) 23 Cal.4th 1, 11, 96 Cal.Rptr.2d 179, 999 P.2d 71 (
Asmus ).) “ ‘It is generally held that the existence of an
implied contract is usually a question of fact for the trial court.
Where evidence is conflicting, or where reasonable conflicting
inferences may be drawn from evidence which is not in conflict, a
question of fact is presented for decision of the trial court.... [¶]
Further, on appeal we must draw all reasonable inferences in favor of
the judgment.’ [Citation.]” (
Caron v. Andrew (1955) 133 Cal.App.2d 412, 416, 284 P.2d 550.)
In
the present case, the trial court found that the evidence did not
permit the inference that plaintiff had intended to agree to arbitrate
disputes with Sports Club. According to the trial court, Gorlach
“made a choice not to sign it.... [S]he didn't sign it, and she quit.”
“There's just no question based on everything that I read that she said
she was never planning on signing this.” The evidence before the trial
court—including that plaintiff did not sign the agreement, inquired as
to the consequences of refusing to sign, and resigned her position with
the company—support the trial court's conclusion that there was no
mutual intent to enter an arbitration agreement.
Sports Club cites
Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 100 Cal.Rptr.2d 818 (
Brown & Root ) for the proposition that the trial court was required to find an implied contract because the evidence was undisputed that Gorlach continued in Sports Club's employ after learning about the arbitration agreement. In
Brown & Root, plaintiff Craig began working for defendant
Brown & Root's predecessor in 1981. In 1993, Brown & Root
established a dispute resolution program that required all
employee-employer disputes to be submitted to binding arbitration. In a
memorandum sent to its employees, Brown & Root informed its
employees: “The enclosed brochure explains the procedures as well as how
the Dispute Resolution Program works as a whole.... IT APPLIES TO YOU.
It will govern all future legal disputes between you and the Company
that are related in any way to your employment.” (
Id. at p. 419, 100 Cal.Rptr.2d 818.) Brown & Root sent copies of the memorandum and brochure to Craig's home in May 1993 and fall 1994. (
Id. at pp. 419–420, 100 Cal.Rptr.2d 818.)
Brown
& Root terminated Craig's employment in April 1997. Craig sued.
Brown & Root petitioned to compel arbitration; the trial court
granted the petition, and the Court of Appeal affirmed. It reasoned that
because general principles of contract law determine whether the
parties have entered a binding agreement to arbitrate, “a party's
acceptance of an agreement to arbitrate may be express [citations] or
implied-in-fact where, as here, the employee's continued employment
constitutes her acceptance of an agreement proposed by her employer
[citations].” (
Id. at p. 420, 100 Cal.Rptr.2d 818.) In the case before it,
evidence credited by the trial court showed that Brown & Root twice
sent copies of its memorandum and brochure to Craig, in 1993 and again
in 1994. (
Id. at p. 421, 100 Cal.Rptr.2d 818.) The court concluded:
“Accordingly, there is substantial evidence (1) that the memorandum and
brochure were received by Craig in 1993 and again in 1994; (2) that she
continued to work for Brown & Root until 1997; and (3) that she
thereby agreed to be bound by the terms of the Dispute Resolution
Program, including its provision for binding arbitration.” (
Id. at p. 422, 100 Cal.Rptr.2d 818.)
*8
We do not agree that
Brown & Root governs the present case. In
Brown & Root, the employee memorandum did not ask
employees to sign an arbitration agreement; it simply informed them that
any employment-related dispute would henceforth be subject to
arbitration. The employee handbook in the present case is different:
Rather than unilaterally imposing an arbitration requirement, the
handbook told employees that, “As a condition to employment, all Team
Members must
sign the Mutual Agreement to Arbitrate Claims.” (Italics added.)
In other words, the handbook told employees that they must sign the
arbitration agreement, implying that it was not effective until (and
unless) they did so. Because Gorlach never signed the arbitration agreement, we cannot imply the existence of such an agreement between the parties.
The present case is analogous to
Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 69 Cal.Rptr.3d 223 (
Mitri ). There, the plaintiffs sued their former employer for
sexual discrimination and harassment. Defendants moved to compel
arbitration. In support of their motion to compel, defendants submitted
copies of their employee handbook, which stated: “ ‘Any dispute arising
out of employment with the Company, as allowed by law, will be settled
by binding arbitration.
As a condition of employment, all employees are required to sign an arbitration agreement.’ ” (
Id. at p. 1167, 69 Cal.Rptr.3d 223, italics added.)
Defendants submitted evidence that both employees had signed an
acknowledgement that they had received the employee handbook, but there
was no evidence that either employee had ever signed the arbitration
agreement referenced in it. (
Ibid.)
The
court concluded that the documents submitted by defendants did not show
that either plaintiff ever consented to binding arbitration: “The
arbitration agreement provision in the employee handbook generally
states an Arnel policy that ‘[a]ny dispute arising out of employment
with the Company, as allowed by law, will be settled by binding
arbitration.’ ... The arbitration agreement provision, however, does not
stop there. It also states that pursuant to Arnel's policy, ‘[a]s a
condition of employment, all employees are required to sign an
arbitration agreement.’ This provision completely undermines any
argument by defendants the provision in the handbook itself was intended
to constitute an arbitration agreement between Arnel and its employees.
The provision further states, ‘[e]mployees will be provided a copy of
their signed arbitration agreement’—thus reinforcing an intent to have
employees sign a separate arbitration agreement to effectuate Arnel's
policy of arbitrating employment claims. Defendants have not produced
any evidence of the existence of such an arbitration agreement signed by
either plaintiff.
“Defendants cite
Asmus [,
supra,] 23 Cal.4th 1, 11 [96 Cal.Rptr.2d 179, 999 P.2d 71] and
DiGiacinto v. Ameriko–Omserv Corp. (1997) 59 Cal.App.4th 629, 637 [69 Cal.Rptr.2d 300],
for the proposition that ‘[i]n order [to] establish that [plaintiffs]
assented to the arbitration agreement, it is only necessary for
[defendants] to show that [plaintiffs] received a copy of the agreement
and that [plaintiffs] continued to work after they received a copy of
the agreement.’ Significantly, however, neither
Asmus nor
DiGiacinto v. Ameriko–Omserv Corp. addressed whether an arbitration agreement
existed between an employer and employee.
*9
“
Asmus, supra, 23 Cal.4th 1 [96 Cal.Rptr.2d 179, 999 P.2d 71],
arose in the context of an employer's discontinuance of a management
employment security policy but did not involve an arbitration agreement.
In
Asmus, the California Supreme Court addressed the issue
whether ‘ “[o]nce an employer's unilaterally adopted policy—which
requires employees to be retained so long as a specified condition does
not occur—has become a part of the employment contract, may the employer
thereafter unilaterally [terminate] the policy, even though the
specified condition has not occurred?” ’ (
Id. at pp. 5–6 [96 Cal.Rptr.2d 179, 999 P.2d 71], fn.
omitted.) In holding an employer could do so, the Supreme Court
recognized that ‘California law permits employers to implement policies
that may become unilateral implied-in-fact contracts when employees
accept them by continuing their employment.’ (
Id. at p. 11 [96 Cal.Rptr.2d 179, 999 P.2d 71].) In
Asmus, both parties agreed that the employees had accepted a unilateral contract by their performance. (
Ibid.) Thus, the question in
Asmus was whether the unilateral contract, once formed, could be unilaterally modified or terminated by the employer. (
Ibid.)
“In
contrast, the core issue in this case, as framed by the motion to
compel arbitration, is whether the documents prepared by Arnel show an
express
bilateral contract was entered into through which the parties agreed to arbitrate. As discussed
ante, the documents do not. At oral argument on appeal,
defendants argued plaintiffs accepted a unilateral contract to arbitrate
by continuing to work for Arnel after their receipt of the employee
handbook. But, as discussed
ante, the employee handbook's arbitration provision only placed
plaintiffs on notice that they would be called upon to sign a separate
binding arbitration agreement, thereby contradicting defendants'
argument the provision in the handbook and subsequent performance
constituted a unilateral contract of binding arbitration. Defendants'
argument on appeal does not withstand legal or factual analysis.... The
arbitration agreements are expressly
mutual—compelling both [p]laintiffs and [d]efendants to arbitrate
‘Any dispute arising out of employment with the Company.’ [¶] ... [¶]
...
Asmus ... [is] inapposite because, as discussed
ante, the arbitration agreement provision contained in the
employee handbook here placed plaintiffs on notice that they would be
required to enter into a separate arbitration agreement with Arnel. As
this record shows, neither plaintiff entered into an arbitration
agreement.” (
Mitri, supra, 157 Cal.App.4th at pp. 1170–1172, 69 Cal.Rptr.3d 223.)
The
Mitri court also distinguished its case from
Brown & Root: “In their reply brief on appeal, defendants also cite
Craig v. Brown & Root, Inc., supra, 84 Cal.App.4th 416, 420 [100 Cal.Rptr.2d 818],
in which the appellate court rejected an employee's contention the
evidence was insufficient to show she entered a binding arbitration
agreement with her employer. The court cited evidence the employer sent
the employee a memorandum informing her of the employer's new dispute
resolution program, emphasized ‘IT APPLIES TO YOU,’ and explained ‘[i]t
will govern all future legal disputes between you and the Company.’
[Citation.] Unlike the arbitration agreement provision in the Arnel
employee handbook, the memorandum in
Craig v. Brown & Root, Inc. established in and of itself
the employer's dispute resolution program, and did not include an
express requirement that its employees sign an arbitration agreement.
Therefore,
Craig v. Brown & Root, Inc., is inapposite.” (
Mitri, supra, 157 Cal.App.4th at p. 1172, 69 Cal.Rptr.3d 223.)
*10
In the present case, as in
Mitri, the employee handbook did not purport unilaterally to
impose an arbitration agreement on its employees; instead, it urged
employees to agree to submit to arbitration and to sign a representation
that “I have entered into the Agreement voluntarily.” Under these
circumstances, the trial court properly inferred from Gorlach's election
not to sign the arbitration agreement that she did not intend to be bound by it.
DISPOSITION
The order denying the petition to compel arbitration is affirmed. Gorlach shall recover her costs on appeal.
No comments:
Post a Comment