In recent years, employees (and their lawyers) have taken a variety of approaches to challenging the enforceability of workplace arbitration agreements. One common tactic has been to claim that they "don't remember signing it" and, therefore, should not be required to arbitrate their claims. And at least one Court in the Second Appellate District has accepted this excuse. See Gamboa v. Northeast Community Clinic, 72 Cal. App. 5th 158 (2021).
However, on January 19, 2023, another district of the California Court of Appeal held that two employees' alleged failure to remember signing an arbitration agreement was insufficient to challenge the authenticity of their handwritten signatures. See Iyere v. Wise Auto Group. The Court reversed the trial court's denial of the employer's motion to compel arbitration on this ground and rejected the trial court's holding that the arbitration agreements were "unconscionable."
The plaintiffs in Iyere had alleged 25 separate employment-related claims against their former employer. In support of its motion to compel arbitration, the employer produced an agreement to arbitrate all employment-related claims that was signed by each employee. In response, the employees submitted declarations stating that they were given a "stack" of documents on their first day of work and "rushed" to sign them without time to read them—unfortunately, this kind of submission has become a formulaic method of attacking otherwise enforceable arbitration agreements. Notably, even though the (attorney-prepared) declarations stated that the plaintiffs "did not recall" signing the arbitration agreements, they also acknowledged that the plaintiffs did indeed sign and return the documents they were given their first day.
The Court of Appeal found that the employees had not successfully met their burden to produce admissible evidence that the signatures were not theirs. Because their declarations indeed stated that they had signed the "stack" of documents—and did not deny that this stack included the arbitration agreements—the Court held that the plaintiffs had failed to show that their signatures on the arbitration agreements were not authentic. Furthermore, even though the plaintiffs claimed that they did not recall signing the agreements, the Court found that not remembering signing an agreement is not inconsistent with having, in fact, signed it.
The Court emphasized that a handwritten signature (like those at issue in this case) is more easily authenticated than an electronic signature. Because individuals typically can recognize their own handwritten signature, a person's failure to remember signing a particular document does not create a factual dispute as to the signature's authenticity so long as they do not deny that a handwritten signature is their own.
The Court of Appeal likewise rejected the plaintiffs' additional arguments regarding purported procedural and substantive unconscionability. The plaintiffs argued, among other things, that the agreement was substantively unconscionable because it was governed by the Federal Arbitration Act (the "FAA") and thus violated section 925 of the California Labor Code ("Section 925"), which prohibits employers from requiring California employees to waive the substantive protections of California law as a condition of employment. However, the Court found that Section 925 does not preclude application of the FAA, because the FAA does not prescribe substantive rules for arbitration.
For some employers, obtaining handwritten signatures is not practical (e.g., due to dispersed or remote workforces or the size of their employee population). However, while electronic signatures are certainly valid if properly authenticated, Iyere makes clear that a "wet" signature is even harder for a plaintiff to challenge based on the excuse of temporary amnesia associated with "not being able to recall" signing it.
Employees Attack Arbitration Agreement By Claiming "Not To Recall" Signing It – And Lose!
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