Opinion
G055611
09-09-2019
TERESA RUIZ, Plaintiff and Respondent, v. OAKLEY, INC., et al., Defendants and Appellants.
Littler Mendelson, Tanja L. Darrow and Jyoti Mittal for Defendants and Appellants. Shegerian & Associates, Carney R. Shegerian and Mahru Madjidi for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2017-00922720) OPINION Appeal from an order of the Superior Court of Orange County, Randall J. Sherman, Judge. Affirmed. Littler Mendelson, Tanja L. Darrow and Jyoti Mittal for Defendants and Appellants. Shegerian & Associates, Carney R. Shegerian and Mahru Madjidi for Plaintiff and Respondent.
INTRODUCTION
Oakley, Inc., appeals from an order denying its motion to compel former employee Teresa Ruiz to arbitrate her employment-related claims. The trial court denied the motion mainly because it could not find any agreement to arbitrate in the documents Oakley submitted to support its motion.
We agree. There is a lot of verbiage about an arbitration agreement, but, like the trial court, we cannot find an actual agreement. Accordingly we affirm the order.
FACTS
Ruiz sued Oakley for a variety of Fair Employment and Housing Act (FEHA) and Labor Code violations. Oakley moved to compel arbitration.
To support its motion, Oakley submitted the English and Spanish versions of page 55 of the Oakley "Practical Handbook," with the heading "Signature Required" and "Declaration and Agreement." The introductory clause of the English version states, "The present document shall serve for the purposes of declaring that I received my copy of the Oakley Practical Handbook and that I familiarized myself with its content and agree to abide by its terms." The Declaration mentions arbitration: "[T]he dispute resolution agreement cannot be changed, altered, reviewed, or amended where I am concerned without (i) the issue of a new dispute resolution agreement containing the corresponding changes or amendments, and (ii) my acceptance of a new declaration and agreement of the code of conduct manual incorporating or making reference to those changes or amendments to the dispute resolution agreement." The Declaration includes a 30-day opt-out provision. "Should I fail to exercise my right to exclude myself from this [dispute resolution] agreement, . . . I agree to abide by its terms." Ruiz's signature and the date June 27, 2011, appear at the bottom of the Spanish version. Oakley represented, and Ruiz did not dispute, that Ruiz did not sign an opt-out form.
The dispute resolution agreement appears on pages 47 through 50 of the handbook. Most of it simply describes an arbitration process. On page 48, however, the agreement provides: "You and Oakley each agree that . . . neither you nor Oakley will (1) file . . . against the other party any lawsuit or court case that relates in any way to your employment."
Ruiz opposed the motion in part by stating that an Oakley representative handed her a booklet and demanded that she sign the "top page," rip out the page, and return it to the representative. She acknowledged that she received a copy of the booklet in Spanish, but contended that she was given only seconds to sign the top page, with no explanation of its contents, and was told she could read the booklet later. She also contended she was never informed about her right to opt out of arbitration.
Oakley did not dispute Ruiz's version of events. In its reply brief, it provided a copy of the opt-out provision in Spanish.
The trial court denied the petition because Oakley had not met its burden to show an enforceable written agreement to arbitrate. "This court has scoured those four pages [pages 47 through 50] and cannot find any language whereby plaintiff agreed to arbitrate any claims. Nor do defendants cite any such language." Although unnecessary to our holding, the trial court pointed out several instances of unconscionability, both procedural and substantive. The court grilled Oakley's counsel at oral argument, but she was also unable to point to language expressing an agreement to arbitrate.
DISCUSSION
"[W]hen a petition to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court itself must determine whether the agreement exists and, if any defense to its enforcement is raised, whether it is enforceable. Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence. If the party opposing the petition raises a defense to enforcement . . . that party bears the burden of producing evidence of, and proving by a preponderance of the evidence, any fact necessary to the defense." (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413 (Rosenthal).)
Interpreting an arbitration agreement is a matter of law, subject to de novo review, when there are no conflicting facts. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236; Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60.) If the trial court resolved a disputed factual question, we review the resolution for substantial evidence, drawing all reasonable inferences in favor of the judgment. (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 12.) We apply California contract law to determine whether a valid agreement to arbitrate exists. (Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787.)
The sine qua non of a successful petition to compel arbitration is an enforceable written agreement. An indispensible element of an enforceable agreement is consent. (Civ. Code, § 1550.) Under Rosenthal, supra, Oakley had the burden of proving the existence of an enforceable agreement by a preponderance of the evidence.
Like the trial court, we have looked in vain for language such as "I agree to arbitrate" in the exhibits submitted by Oakley. The dispute resolution agreement provides that neither Ruiz nor Oakley will file an employment-related lawsuit against the other, and the acknowledgement obligates Ruiz to abide by this term of the dispute resolution agreement. But these provisions do not obligate either Ruiz or Oakley to arbitrate.
On appeal, Oakley has contended that Ruiz expressed her agreement to arbitrate by continuing to work after she signed the declaration and agreement. The cases Oakley cites do not support its position.
In Craig v. Brown & Root (2000) 84 Cal.App.4th 416 (Craig), the employer instituted a dispute resolution procedure that included binding arbitration "and emphasized . . . that everyone would be bound by it[.]" (Id. at pp. 418-419.) There was nothing for the employees to sign; they were simply sent a brochure. (Id. at p. 419.) When a terminated employee sued, the court held that "the employee's continued employment constitutes her acceptance of an agreement proposed by her employer[.]" (Id. at p. 420.)
In this case, however, the acceptance of the agreement depended on signing a declaration page, not on continuing to work. Furthermore, as stated above, there was no agreement to arbitrate, merely an agreement not to file suit. So continuing to work could not be an implied-in-fact acceptance of an agreement to arbitrate. (See Craig, supra, 84 Cal.App.4th at p. 420.)
Similarly Asmus v. Pacific Bell (2000) 23 Cal.4th 1 (Asmus), does not assist Oakley. In Asmus, the Supreme Court granted a request from the Ninth Circuit to answer a certified question of law: may an employer terminate a unilaterally adopted policy? (Id. at p. 6.) Pacific Bell sought to rescind a job security policy that had been in place for six years. (Id. at pp. 7-8.) The court stated, "The general rule governing the proper termination of unilateral contracts is that once the promisor determines after a reasonable time that it will terminate or modify the contract, and provides employees with reasonable notice of the change, additional consideration is not required. . . . Here, Pacific Bell replaced its [job security policy] with a subsequent layoff policy. Plaintiffs' continued employment constituted acceptance of the offer of the modified unilateral contract." (Id. at pp. 14-15.)
In this case, however, and leaving aside the question of whether an enforceable arbitration agreement can be unilateral, Oakley explicitly gave up any right to make unilateral changes in the dispute resolution agreement. The declaration page provided, "[T]he dispute resolution agreement cannot be changed, altered, reviewed, or amended where I am concerned without (i) the issue of a new dispute resolution agreement containing the corresponding changes or amendments, and (2) my acceptance of a new declaration and agreement of the code of conduct manual incorporating or making reference to those changes or amendments to the dispute resolution agreement." Moreover, Oakley presented no evidence of an effort to terminate or modify an existing agreement. The pages from the handbook do not contain an agreement to arbitrate by the employee, so there was nothing to accept by continuing to work, even if a signature was not required.
There is no indication in the record as to the existence of a code of conduct manual.
DISPOSITION
The order denying the petition to compel arbitration is affirmed. Respondent will recover her costs on appeal.
BEDSWORTH, ACTING P. J. WE CONCUR: MOORE, J. GOETHALS, J.