Historically, a common tactic used by employees to evade mandatory arbitration is to claim they do not recall signing an arbitration agreement bearing their signature. In a 2021 case, Gamboa v. Northeast Community Clinic, the California Court of Appeal – Second Appellate District added fuel to the fire by using that excuse to deny enforceability of an otherwise valid employment arbitration agreement.
Early this year, however, the California Court of Appeal – First Appellate District adopted a view more favorable to employers in Iyere v. Wise Auto Group by holding that two employees' alleged failure to remember signing their arbitration agreements is insufficient to challenge the authenticity of their handwritten signatures.
In Iyere, which was decided on January 19, 2023, three former employees filed a joint complaint against their employer in Marin County Superior Court alleging discrimination, harassment, and retaliation, among other claims. The employer moved to compel the claims to arbitration based on arbitration agreements bearing the handwritten signatures of each plaintiff. In opposition, each of the three employees submitted declarations stating they were handed “a large stack of documents” on their first day of work and were “rushed” to sign the documents. Each of the plaintiffs also asserted they “[did] not recall ever reading or signing” the arbitration agreements.
The trial court denied the motion to force arbitration, finding the employer failed to meet its burden of proving the authenticity of the handwritten signatures. The Court of Appeal reversed this decision, holding the plaintiffs' inability to recall signing the agreements was not sufficient evidence to dispute the authenticity of their handwritten signatures. Only if the plaintiffs showed some evidence (other than “I don't remember”) to show that their signatures were not authentic would the employer be required to authenticate the handwritten signatures.
Critically, the Court of Appeal noted that none of the plaintiffs declared that he did not sign the arbitration agreement. Moreover, the plaintiffs admitted they signed a “stack of documents,” but no plaintiff denied that the arbitration agreement was included in the stack of documents they received. Finally, the Court of Appeal explained that “there is no conflict between having signed a document on which [your] handwritten signature appears and, two years later, being unable to recall having done so.”
While this case symbolizes a rare “win” for employers in the Golden State, its applicability is likely limited to handwritten signatures. In dicta, the Court of Appeal in Iyere described the “considerable difference” in evidence needed to authenticate handwritten versus electronic signatures and noted that an individual's inability to recall electronically signing an agreement could be regarded as sufficient evidence that the individual did not sign it.
In sum, Iyere serves as a weapon for employers utilizing hand-signed arbitration agreements to use against the often-cited “I don't recall” defense to enforcement of arbitration agreements, while also highlighting the importance of establishing robust methods for properly authenticating electronic signatures on arbitration agreements.
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