Esparza v. Sand & Sea, Inc., B268420
Citation | 2 Cal.App.5th 781,206 Cal.Rptr.3d 474 |
Decision Date | 22 August 2016 |
Docket Number | B268420 |
Court | California Court of Appeals |
Parties | January ESPARZA, Plaintiff and Respondent, v. SAND & SEA, INC., et al., Defendants and Appellants. |
Telep Law, Desiree Telep, Irvine, Tina Dao for Plaintiff and Respondent.
Greenberg Traurig, Mark D. Kemple, Karin L. Bohmholdt and Nicholas A. Insogna, Los Angeles, for Defendants and Appellants.
COLLINS
, J.
INTRODUCTION
The question in this case is whether an arbitration provision in an employee handbook is legally enforceable. The employee handbook containing the arbitration provision included a welcome letter as the first page, which stated, “[T]his handbook is not intended to be a contract (express or implied), nor is it intended to otherwise create any legally enforceable obligations on the part of the Company or its employees.” The employee signed a form acknowledging she had received the handbook, which mentioned the arbitration provision as one of the “policies, practices, and procedures” of the company. The acknowledgement form did not state that the employee agreed to the arbitration provision, and expressly recognized that the employee had not read the handbook at the time she signed the form. Under these circumstances, we find that the arbitration provision in the employee handbook did not create an enforceable agreement to arbitrate. We therefore affirm the trial court's denial of the employer's petition to compel arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff and respondent January Esparza began employment at Shore Hotel on November 19, 2012. On her first day of work, Esparza was given an employee handbook. The first page of the handbook stated:
“Welcome to Shore Hotel!
* * *
“Welcome aboard!”
We will refer to this page of the employee handbook as the “welcome letter.”
A section titled “Agreement to Arbitrate” spanned pages 3 and 4 of the employee handbook. Unlike the rest of the employee handbook, this section was printed in all capital letters, and it was written in the first person from the employee's perspective. The section began, The section discussed the scope of disputes under the agreement, the qualifications for an arbitrator, and other procedural issues relating to arbitration. It continued, “I understand and agree to this binding arbitration provision, and both I and the company give up our right to trial by jury of any claim I or the company may have against each other.”
The handbook then explained employment basics such as the company anti-harassment policy, the attendance policy, the dress code, and payroll. The last two pages of the 52–page employee handbook consisted of identical copies of a “policy acknowledgement,” one labeled as the employer copy, and one labeled as the employee copy. The policy acknowledgement stated:
“While this handbook is not intended to state all of the conditions of employment and all of the principles which help to guide our people in the performance of their duties, it will give you general information in regard to certain policies and benefits related to your employment.
* * *
Esparza signed the policy acknowledgement on November 19, 2012, her first day of work. Esparza's employment with Shore Hotel ended on August 2, 2013. On July 8, 2014, Esparza filed a complaint against Shore Hotel; she later added Steve Farzam, identified as the owner of the hotel, as a defendant.
In her first amended complaint, which was the operative complaint below, Esparza alleged causes of action for sexual harassment, sex discrimination, wrongful termination, and intentional infliction of emotional distress.
On July 28, 2015, more than a year after Esparza first filed her complaint, defendants filed a petition to compel arbitration. Defendants argued that Esparza's claims arose from her employment at Shore Hotel, and “because Plaintiff signed her assent to a conspicuous and unambiguous agreement to arbitrate claims of the very type at issue here, arbitration is mandatory.” Defendants acknowledged that both parties had served discovery requests, and defendants' demurrer to the first amended complaint was pending before the court. With their motion, defendants submitted the entire employee handbook, including the welcome letter and the policy agreement signed by Esparza.
Esparza opposed defendants' petition to compel arbitration. She argued, Esparza also argued that the arbitration provision was procedurally and substantively unconscionable, and that defendants forfeited their right to demand arbitration by engaging in litigation for a year before seeking to enforce the arbitration provision.
In their reply, defendants argued that Esparza “freely agreed to arbitrate all disputes arising from her employment.” They argued that the policy acknowledgment Esparza signed “expressly incorporated the employment terms and conditions of employment [sic] set forth in the preceding pages.” Because Esparza had a week to review the handbook, defendants argued, she had the opportunity to “accept employment subject to [the handbook's] terms, or to seek employment elsewhere.” Defendants also argued that the terms of the employment agreement were not unconscionable, and that defendants' participation in the very early stages of litigation should not be deemed a forfeiture of their right to arbitrate.
The trial court denied defendants' petition. It held, in full,
Defendants timely appealed.
STANDARD OF REVIEW
There is a strong public policy favoring contractual arbitration, but that policy does not extend to parties who have not agreed to arbitrate. (Molecular Analytical Systems v. Ciphergen Biosystems, Inc . (2010) 186 Cal.App.4th 696, 704, 111 Cal.Rptr.3d 876
(Molecular Analytical Systems ).) To establish a valid agreement to arbitrate disputes, “[t]he petitioner bears the burden of proving the existence of a valid arbitration agreement by [a] preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.” (Engalla v. Permanente Medical Group, Inc . (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903.) California law governs the determination as to whether an agreement was reached. (Rosenthal v. Great Western Fin. Securities Corp . (1996) 14 Cal.4th 394, 409–410, 58 Cal.Rptr.2d 875, 926 P.2d 1061 (Rosenthal ).) “[W]hen a petition to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the...
To continue reading
Request your trial-
Mendoza v. Trans Valley Transp.
...favoring contractual arbitration does not extend to parties who have not agreed to arbitrate. ( Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787, 206 Cal.Rptr.3d 474 ( Esparza ).) As the California Supreme Court explained in Pinnacle , in "California, ‘[g]eneral principles of contr......
-
Vaughn v. Tesla, Inc.
...the application of the Arbitration Provision well beyond the reasonable expectations of the parties. (See Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 788, 206 Cal.Rptr.3d 474 [" ‘An essential element of any contract is the consent of the parties, or mutual assent.’ ... ‘Mutual ass......
-
Diaz v. Sohnen Enters., B283077
...926 P.2d 1061 ; Flores v. Nature’s BestDistribution, LLC (2016) 7 Cal.App.5th 1, 9, 212 Cal.Rptr.3d 284 ; Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787, 206 Cal.Rptr.3d 474.)B. The Record Demonstrates Consent to Arbitration When presented with a petition to compel arbitration, t......
- Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union—Pac. Mar. Ass'n Welfare Plan