Opinion
G054134
05-23-2018
VICTOR ESTRADA, Plaintiff and Appellant, v. AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA, Defendant and Respondent.
Becerra Law Firm and Joseph R. Becerra; Law Office of William O. Kampf and William O. Kampf for Plaintiff and Appellant. Grignon Law Firm, Margaret M. Grignon and Anne M. Grignon; Automobile Club of Southern California, John K. Beckley and Michael P. Wallock; and Carothers Disante & Freudenberger, Timothy M. Freudenberger and Garrett V. Jensen for Defendant 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2013-00637388) OPINION Appeal from a judgment of the Superior Court of Orange County, Thierry Patrick Colaw and Deborah C. Servino, Judges. Reversed and remanded. Becerra Law Firm and Joseph R. Becerra; Law Office of William O. Kampf and William O. Kampf for Plaintiff and Appellant. Grignon Law Firm, Margaret M. Grignon and Anne M. Grignon; Automobile Club of Southern California, John K. Beckley and Michael P. Wallock; and Carothers Disante & Freudenberger, Timothy M. Freudenberger and Garrett V. Jensen for Defendant and Respondent.
* * *
Appellant Victor Estrada appeals following the trial court's decision to order him to arbitrate his disputes with his former employer, the Automobile Club of Southern California (the Auto Club). He argues there was never a valid arbitration agreement. He further contends that even if the case was properly ordered to arbitration, the arbitrator failed to provide the proper disclosures about previous rulings in the Auto Club's favor.
We conclude there is no substantial evidence of an agreement to arbitrate in this particular case. There is no signed agreement; merely a declaration by a supervisor that does not include the requisite facts to support the conclusion that Estrada was ever given a copy of the arbitration agreement. We therefore reverse and remand, and need not consider Estrada's remaining argument with respect to arbitrator disclosures.
I
FACTS
A. Underlying Facts
In 2013, Estrada filed a complaint alleging 10 employment related claims against the Auto Club, including wage and hour claims, violation of the California Family Rights Act (Gov. Code, § 12945.2 et seq.), wrongful termination in violation of public policy, violations of the Unfair Practices Act (Bus. & Prof. Code, § 17200), and violation of the Private Attorney General Act (Lab. Code, § 2699).
We need not delve into the facts too deeply, but according to the complaint, Estrada began his employment with the Auto Club in 1980, and worked there until he was terminated in 2012. His title at the time he was terminated was Senior Operation Support Analyst. He received numerous promotions and pay increases, and was a non-exempt employee. In September 2011, he requested family medical leave to help care for his mother, who had been diagnosed with cancer. He requested a reduced schedule and permission to leave early one day a week.
Around the same time, the complaint alleged, the Auto Club attempted to install new computer software that caused errors for numerous employees, including Estrada. He was required to work overtime, for which he alleged he was not properly compensated, during this period. Due to "inadequate training and a rushed implementation," he, as well as other employees, made mistakes with the new software.
With respect to his leave, Estrada alleged that he was pressured by his supervisor to complete the same, if not more, amount of work while he was on leave. He was also required to respond to cell phone calls while away from work. The supervisor allegedly "did not care" that Estrada was on family medical leave and expected him to work the 80 to 90 hours per week that other employees were working during this time to implement the new software. Because other employees were working such hours, the supervisor expressed to Estrada that he felt Estrada was not doing his part.
In December, Estrada's supervisor wrote him up for a failure to have another employee review a certain piece of work. In February 2012, he was written up for what Estrada described as an error being routinely made by other employees, which was related to the new software implementation. He was the only employee on family leave and the only one written up for such errors.
On April 10, 2012, Estrada was terminated, purportedly for an error relating to the software system that inadvertently caused an excess charge to customers. Estrada noticed the error, fixed it, and notified his supervisor the next day. (The Auto Club, for its part, claims this mistake was costly.) He was still taking family medical leave at this time. The complaint alleged that Estrada's supervisor understood this type of error was occurring throughout the department. Several weeks later, Estrada was terminated. Estrada alleged that by that time "it was clear that [the supervisor] was simply looking for a reason to terminate [Estrada's] employment due to [the supervisor's] expressed dissatisfaction that he did not feel that [Estrada] was 'pulling his weight' due to being on a reduced schedule for his family medical leave."
Estrada filed a complaint with the Department of Fair Employment and Housing and subsequently received a right to sue letter. He later filed the instant complaint. B. Motion to Compel Arbitration
Shortly thereafter, the Auto Club moved to stay the lawsuit and compel the parties to arbitration. The relevant facts were mostly testified to by Tony Van Son, a manager in Estrada's department in 2004 and 2005. In December 2004, all California employees, Van Son's declaration stated, were sent a memorandum from Jim Philipp, Vice President of Human Resources, stating that going forward, the Auto Club would require arbitration agreements for all current employees. A copy of the arbitration agreement was purportedly attached to this memo, and included as an exhibit to Van Son's declaration. As we will discuss in a moment, this entire portion of the declaration was later stricken by the court in response to an evidentiary objection.
Although numerous other parts of Van Son's declaration were stricken, this is by far the most relevant, and therefore we mention it here. The remainder of our recitation of the contents of the Van Son declaration will include only those portions that survived Estrada's evidentiary objections.
At the time, Van Son's declaration continued, Estrada was working "as a Senior Analyst Support Operations in the Enterprise Infrastructure Department." Van Son stated: "Throughout 2005, I met with the employees in my department, either personally or as part of team meetings, to discuss the 2005 Arbitration Agreement. As part of these meetings, I handed out another copy of Jim Philipp's memorandum and the Arbitration Agreement to the employees in my department, including [Estrada]."
Van Son's declaration continued: "I do not recall [Estrada] asking any questions or having any issues with the Arbitration Agreement during any meetings I had with him or at any other time. Likewise, I do not have a recollection that [Estrada] ever informed me that he objected to the Arbitration Agreement, nor am I aware that he advised any other employee of the Auto Club that he objected to it."
"After I met with each employee," Van Son's declaration stated: "[A]n electronic Excel spreadsheet was recorded and updated to confirm the fact that the respective employee had received a copy of the 2005 Arbitration Agreement. This included [Estrada]." A copy of a page of the spreadsheet was attached as an exhibit. Approximately 40 other employees from the same department are also listed by name. Under the column stating that each employee received a copy of the agreement is a computer-written "X."
Van Son's declaration also stated he signed an "Acknowledgment Form . . . confirming that each of the individuals on the spreadsheet for whom an 'X' was placed next to their name received a copy of the Arbitration Agreement." Finally, Van Son stated that Estrada had the ability to contact human resources to request a copy of the arbitration agreement, had he wished to do so.
Estrada opposed the motion, arguing, among other things, that the Auto Club could not meet its burden to establish the existence of a valid agreement. Estrada's supporting declaration stated: "Simply put, I did not receive a copy of any Arbitration Agreement while employed with [the Auto Club]. The first time that I ever saw a copy of the Arbitration Agreement was after I was . . . terminated by [the Auto Club] and I was shown a copy by my attorney. He recalled "being in numerous meetings with Mr. Van Son throughout my employment with [the Auto Club]. However, I have no recollection of any meeting where Mr. Van Son provided me or any other employee with a copy of the Arbitration Agreement. Further, I have no recollection of Mr. Van Son ever even discussing an Arbitration Agreement at any meeting or otherwise."
In support of the Auto Club's reply brief, Van Son filed a reply declaration, attaching pages from 2008 and 2012 employee handbooks that "references" the arbitration policy. Also attached were Estrada's acknowledgments of receiving the handbooks.
The handbooks, which are of undetermined length, include the following statement somewhere within: "Accordingly, any disputes employees may have with the Club and any disputes the Club may have with employees will be resolved, when applicable, by submission to binding arbitration pursuant to the Club's Mutual and Binding Arbitration Agreement applicable to all employees. Binding arbitration provides a cost-effective, efficient alternative for employees and employers to resolve their differences outside of the regular litigation process." The language is identical for both 2008 and 2012.
With respect to the acknowledgments of receipt, for 2008, this is a rather traditional acknowledgment that purports to be signed by hand. For 2012, the document is a computer-generated acknowledgment with Estrada's name on top, and a "status" that reads "Mastered." It includes no substantive language. C. The Court's Ruling
The motion was heard in June 2013. The trial court issued a written minute order several days after the hearing. The court sustained and overruled a number of each party's evidentiary objections. Most pertinent here, as we noted above, the court sustained Estrada's objection to the part of Van Son's declaration that discussed the initial distribution of the memo and arbitration agreement in late 2004.
As to the first part of the paragraph, which stated: "On December 15, 2004, a memorandum from Jim Philipp, the Auto Club's Vice President of Human Resources, was circulated to all of the Auto Club's California employees, including myself, advising all such employees of additional changes to be made to the exclusive and binding arbitration process to resolve all employee-employer related disputes."
The court ruled: "Foundation and hearsay [objections] sustained. There is insufficient information provided by Van Son showing that he has personal knowledge of what HR VP Jim Philip[p] did in 2004 relative to the other employees such as [Estrada]. Mr. Van Son apparently was not in HR at that time and appeared instead to be a manager in an AAA division unrelated to HR. We need Philip[p's] declaration or his successor's declaration to confirm these actions and documents."
Estrada also objected to the remainder of that paragraph. It reads: "In that memorandum, Philipp informed employees that as of January 1, 2005, the Auto Club would be requiring arbitration not just for 'new hires' who had signed pre-hire arbitration agreements, but for all current employees regardless of whether they had previously signed an arbitration agreement, pursuant to an updated mutual and binding arbitration agreement. Attached to the memorandum was a copy of the Mutual and Binding Arbitration Agreement ('Arbitration Agreement') which would govern all disputes between the Auto Club and its employees. Attached as Exhibit 'A' is a true and correct copy of Jim Philipp's December 15, 2004 memorandum and the Arbitration Agreement that was attached to the memorandum."
The court sustained Estrada's objections to this portion of the paragraph, ruling: "Best [e]vidence and [l]egal conclusion objections are sustained as is the foundation objection."
Moving on to the substance of the motion, the court stated: "The motion is GRANTED. It is more likely than not that Estrada did receive a copy of the Arbitration provisions in the employee handbook on two occasions, once from Van Son and again when he received subsequent copies of the Handbook." (There is no indication in the record that the agreement was distributed with the handbook.)
The court stated it was "only required to make a finding of the agreement's existence, not an evidentiary determination of its validity." The court acknowledged Estrada's declaration stated "he did not receive a copy of any Arbitration Agreement while employed with [the Auto Club], nor did he ever sign an Arbitration Agreement. . . . He also states that he has no recollection of any meeting where Tony Van Son provided him or any other employee with a copy of the Arbitration Agreement, nor does he recollect ever discussing an Arbitration Agreement at any meeting or otherwise." Van Son's declaration, the court stated, "establishes that [Estrada] did in fact receive a copy of the Arbitration Agreement on December 15, 2004 as attached to the circulated Memorandum from Jim Phi[lipp], VP of Human Resources (Ex. A). . . . Further, another copy of the Arbitration Agreement was provided to employees in 2005 as evidenced by the defendant's spreadsheet and signed Acknowledgment Form (Ex. B) . . . ."
As we noted previously, however, the court had, earlier in the same order, expressly ordered stricken the paragraph relating to Philipp's actions in 2004. The court went on to quote from the purported agreement, which was not before the court due to that ruling, with respect to Estrada's continued employment constituting an agreement to arbitrate.
The court then stated: "[Estrada's] declaration does not state that he did not receive the December 15, 2004 Memorandum with the attached Arbitration Agreement. He only claims that he did not receive a copy of the Arbitration Agreement while employed with [the Auto Club]." Again, the December 15 memorandum and attached agreement had previously been stricken.
We cannot find a way to read these two sentences that logically computes. If Estrada's declaration states he did not receive a copy of the agreement "while employed," that would necessarily include the fact that he did not receive the December 15, 2004 memorandum - which, as we have noted at several points, was not properly before the court.
In granting the motion, the court also stayed the case pending arbitration.
The case proceeded to arbitration, and Estrada lost. The Auto Club petitioned to confirm the arbitration award, and Estrada moved to vacate it. The court denied Estrada's petition and granted the Auto Club's. Judgment was subsequently entered in the Auto Club's favor. Estrada now appeals.
II
DISCUSSION
A. General Principles of Law and Standard of Review
We use general principles of California contract law to determine the enforceability of an arbitration agreement. (Mission Viejo Emergency Medical Associates v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1153.) "'If the court's order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court's denial rests solely on a decision of law, then a de novo standard of review is employed. [Citations.]' [Citation.]" (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60.)
Code of Civil Procedure section 1281.2 requires a court to order arbitration "if it determines that an agreement to arbitrate . . . exists . . . ." California has a strong public policy in favor of arbitration as an expeditious and cost-effective way of resolving disputes. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) Even so, parties can only be compelled to arbitrate when they have agreed to do so. (Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 763.) "The strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement, and a party cannot be compelled to arbitrate a dispute that he has not agreed to resolve by arbitration. [Citation.]" (Benasra v. Marciano (2001) 92 Cal.App.4th 987, 990; see § 1281 [right to arbitration depends on contract].) "Arbitration . . . is a matter of consent, not coercion . . . ." (Volt Information Sciences, Inc. v. Board of Trustees (1989) 489 U.S. 468, 479.) The party seeking to compel arbitration, therefore, bears the burden of proving the existence of a valid arbitration agreement. (Garrison v. Superior Court (2005) 132 Cal.App.4th 253, 263.)
All further undesignated statutory references are to the Code of Civil Procedure.
"[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 . . . . 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." (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413; see Volt Information Sciences, Inc. v. Board of Trustees, supra, 489 U.S. at pp. 475-476 [state contract formation law applies]; Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 761-762 [enforceability determined in manner provided by law for the hearing of motions].) "'Prima facie evidence is that degree of evidence which suffices for proof of a particular fact until contradicted and overcome, as it may be, by other evidence, direct or indirect.'" (People v. Van Gorden (1964) 226 Cal.App.2d 634, 636-637.) Once the moving party has established the existence of the arbitration agreement, the burden shifts to the party opposing arbitration to establish, by a preponderance of the evidence, the factual basis for any defense to enforcement. (Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 413.) B. The Auto Club's Evidence of an Agreement to Arbitrate
1. Van Son's Declaration and Supporting Evidence
We must first discuss a threshold issue: whether the alleged arbitration agreement itself was properly before the trial court, or before us. As we discussed above, Van Son's declaration attempted to discuss Philipp's actions in 2004 with respect to the circulation of the memorandum with the agreement attached. The court specifically rejected this on the grounds of foundation and hearsay, stating there was "insufficient information provided by Van Son showing that he has personal knowledge of what HR VP Jim Philip[p] did in 2004 relative to the other employees . . . . We need Philip[p's] declaration or his successor's declaration to confirm these actions and documents." In the next few sentences, Van Son stated the agreement was attached as exhibit "A" to his declaration. The trial court granted the objection to this part of Van Son's declaration on the grounds of best evidence, legal conclusions, and lack of foundation. (The Auto Club did not file a protective cross-appeal arguing these evidentiary rulings were wrong.)
We must, of course, acknowledge that the trial court, in its ruling on the substance of the motion, referred to the agreement anyway. We can only conclude this was a drafting error of some kind, because the trial court's rulings on the evidentiary issues are clearly correct. Van Son did not have the requisite personal knowledge as to what Philipp did in 2004; he did not even claim he had such knowledge. At best, he could state that he received a memorandum from Philipp; he had no basis on which to claim that Philipp's memo was "circulated to all of the Auto Club's California employees," which is the fact most pertinent to this case. Because he did not have such knowledge, he could also not attest that the memorandum and agreement offered as exhibit "A" was sent to all employees.
Accordingly, it does not appear that the purported agreement itself was ever properly before the trial court. Rule 3.1330 of the California Rules of Court states: "A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference."
Subsequent rule references are to the California Rules of Court.
While two paragraphs of the agreement are included in the Auto Club's moving papers, they refer back to the exhibit offered by Van Son. No other declaration included the agreement as an exhibit. This failure must be entirely attributed to the Auto Club, who could have offered the declarations of any number of employees, especially once they read Estrada's evidentiary objections, to be certain the agreement would be properly before the court. They did not do so, and the lack of a true and correct copy of the agreement, or its governing terms, were sufficient grounds to deny the motion to compel arbitration.
Even if we assume that a mere recitation of the alleged terms, without a supporting declaration, is sufficient, we must turn and examine the rest of the evidence offered by the Auto Club to determine if there is substantial evidence that Estrada ever received it. "'Substantial evidence' is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value. [Citations.] . . . Inferences may constitute substantial evidence, but they must be the product of logic and reason. Speculation or conjecture alone is not substantial evidence." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.)
The Auto Club argues: "[Estrada] agreed to arbitrate his disputes with Auto Club. Auto Club presented evidence that [Estrada] attended a meeting in 2005 with his department manager, where the manager provided him with a memorandum describing Auto Club's mandatory Arbitration Agreement and a copy of the actual Arbitration Agreement requiring employees to arbitrate all employment disputes with Auto Club. . . . [T]he trial court's finding here was supported by a declaration that the arbitration agreement had been provided to all employees on a list, including [Estrada]."
This is a somewhat finessed version of Van Son's actual declaration, which does not, at any point, unequivocally state that Estrada attended a meeting in 2005. Rather, Van Son's declaration states he "met with the employees in my department, either personally or as part of team meetings to discuss the 2005 Arbitration Agreement." This did not include any specific recollection of Estrada's presence at one of these meetings, or even a bare assertion he was present. Nor did it provide any detail to support an inference that Estrada was indeed present. No information about the meetings - such as date, time, or place - which would support an inference Van Son actually had a specific memory of these meetings - was offered. Van Son did not state which meeting Estrada attended, or if he met with Estrada in a group or individually (the declaration can be read either way).
Van Son then stated: "As part of these meetings, I handed out another copy of Jim Philipp's memorandum and the Arbitration Agreement to the employees in my department, including [Estrada]." This does not, however, clarify whether Van Son had a specific recollection of Estrada's presence at a meeting. The next operative portion of Van Son's declaration stated that he does not recall Estrada asking questions or raising objections, which does not prove much of anything.
With respect to the spreadsheet, Van Son's declaration stated that "[a]fter I met with each employee, an electronic Excel spreadsheet was recorded and updated to confirm the fact that the respective employee had received a copy of the 2005 Arbitration Agreement. This included [Estrada]." Again, Van Son's recollections are entirely nonspecific. He did not state that he has any memory of checking Estrada's name off on the spreadsheet, or what his practice was for assuring that he marked the spreadsheet accurately. He did say he marked the spreadsheet "after" the meetings "with each employee," but that highlights the uncertainty of how he kept track of which employees were present at each meeting. Did he use a sign-in sheet at group meetings? Call a roll of attendees? Use some other method? This kind of information is not in his declaration.
Finally, Van Son's declaration stated that Estrada could have requested a copy of the arbitration agreement from human resources at any time. We fail to see what reasonable inferences we can draw from this, or why someone would request a copy of a document they had no reason to believe existed. In any event, Van Son provided no evidence that Estrada ever did so.
The cases the Auto Club relies upon to argue the agreement is valid are entirely distinguishable. In Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416 (Craig), a case the parties seem to concur represents the very minimum an employer must do to bind parties to an arbitration agreement, the employer sent the agreement to the employees home, twice, via postal mail. The court held employee's "equivocal denial of receipt," was not sufficient to overcome the employer's evidence the agreement had been mailed. (Id. at p. 421.)
At oral argument, the Auto Club's counsel referred to the following excerpt from Craig: "On this appeal, the disappearance of the presumption [under Evidence Code section 604, regarding sending documents via the U.S. Mail] is moot. Its only relevance was in the trial court, where the trier of fact (in this context, the court) was required to determine the contested fact (whether the memorandum and brochure were received by Craig) without regard to the presumption and solely on the basis of the conflicting evidence - Brown & Root's declarations and documents showing that the items were mailed to Craig at her home address and not returned, and Craig's equivocal denial of receipt. The trial court decided that issue in favor of Brown & Root, and its credibility call is binding on this appeal. (Estate of Joslyn (1995) 38 Cal.App.4th 1428, 1434 . . . .)" (Craig, supra, 84 Cal.App.4th at p. 421, italics added.) Counsel argued that based on the last sentence, we are required to accept the trial court's factual findings without question because they involve a "credibility call."
This, however, would turn the substantial evidence rule on its head. The case Craig cites for this proposition, Estate of Joslyn, was referring to the court's credibility judgment of live testimony, which, of course, is an altogether different matter. A cold record cannot substitute for live testimony, and the credibility of a witness when offered in person, is, of course best judged by the trial court or jury.
But accepting that we must defer to the trial court's findings of fact when the matter is decided through declarations and documentary evidence would require us to simply accept the factual findings of the trial court, regardless of how unsupported by the evidence they might be. Deciding which version of the facts is more likely than not true always involves credibility on some level. Further, despite its comment, the court in Craig applied the substantial evidence test. Immediately after the sentence referencing credibility calls, the court went on to state: "The disappearance of the presumption does not mean there is insufficient evidence to support the trial court's finding. . . . [¶] 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." (Craig, supra, 84 Cal.App.4th at pp. 421-422, italics added.)
We offer two further points with regard to Craig. First, the lower court in that case was not truly making a "credibility call." There is nothing in the record to indicate that a witness was lying, for example. The trial court was deciding which competing version of events was more likely - as trial courts always do in such situations - and as appellate courts always review for substantial evidence. It was not truly judging the credibility of a particular witness or document.
Second, in the 18 years since Craig was decided, it has not been cited by another published case for the proposition that the trial court's factual findings must be accepted by an appellate court without question.
Our research revealed that sentence in Craig has only been quoted or otherwise referred to in one other published opinion, in a recitation of what the court found in that case. (Marenco v. DirectTV, LLC (2015) 233 Cal.App.4th 1409, 1418.)
We choose to think that the court in Craig inadvertently chose some inartful language. But to the extent Craig says what the Auto Club thinks it says, we disagree and decline to follow it. Rather, our review is under the well-known substantial evidence standard. (Avery v. Integrated Healthcare Holdings, Inc., supra, 218 Cal.App.4th at p. 60.) In that light, the facts of Craig are distinguishable. Although not stated in great detail, it appeared the employer in Craig offered specific evidence of its procedures for mailing the arbitration agreement to all employees, which supported an inference the employee had actually received it.
Such an inference is not reasonable here, and Van Son's declaration does not meet the low threshold of substantial evidence. He does not assert that he specifically recalls Estrada being present for any of the multiple meetings he had with his employees in 2005. He does not state that he has a specific recollection of handing the arbitration agreement to Estrada. He also does not state that he has any memory of checking Estrada's name off on the spreadsheet. He does not state that Estrada was required to be at any particular meeting or that anything indicates he attended one. Instead, he apparently relied on his memory of his general practices at the time, and assumed his own record keeping was accurate.
We cannot conclude this is the substantial evidence the law requires. The bar for employers to require employees to arbitrate is already quite low. An employee need not truly and freely consent to arbitration. An employee need not sign an arbitration agreement. An employee can be fired for refusing to accept an arbitration agreement. But at a very minimum, an employer must be able to demonstrate, by a preponderance of the evidence, that the employee actually received the arbitration agreement. The Auto Club has failed to do so in this case.
2. The Handbook Acknowledgments
The Auto Club also argues the handbook acknowledgements were enough to bind Estrada to the arbitration agreement. But the handbook alone is insufficient to demonstrate that Estrada received the actual arbitration agreement, and the handbook's reference to an arbitration agreement does not, itself, constitute a binding agreement.
The Auto Club points only to language in the acknowledgement of receiving the handbook that: "'I understand that I am governed by the contents of the handbook,'" and that Estrada thereafter continued to work for the Auto Club without objection. Nowhere did the acknowledgment state that the handbook contained binding contractual provisions; rather it stated the handbook contained "information on the general personnel policies and on my privileges and obligations as an employee." We cannot construe a provision acknowledging a handbook's policies and procedures as sufficiently incorporating a contractual provision relating to arbitration.
This language is in the 2008 acknowledgment only. The 2012 acknowledgment is a computer-generated unsigned form that includes no such language. Arguably, this acknowledgment replaces and supersedes the 2008 acknowledgment in any event.
This case bears similarity to Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164 (Mitri). In Mitri, the defendants' employee handbook stated: "'As a condition of employment, all employees are required to sign an arbitration agreement' and further states, '[e]mployees will be provided a copy of their signed arbitration agreement.'" (Id. at p. 1166.) The defendants did not produce a signed copy of the arbitration agreement, but contended the handbook's reference was sufficient to force the plaintiffs to arbitrate because the plaintiffs had signed copies of an acknowledgment of receipt of the employee handbook. (Id. at pp. 1166, 1168.)
This court held that acknowledging receipt of the handbook was insufficient: "Conspicuously absent from the acknowledgment receipt form is any reference to an agreement by the employee to abide by the employee handbook's arbitration agreement provision. Indeed, the line preceding each plaintiff's signature on his or her respective acknowledgment receipt form explains, '[m]y signature acknowledges that I have read and understood the statements above as well as the contents of the Handbook, and will direct any questions to my supervisor or the Director of Human Resources.'" (Mitri, supra, 157 Cal.App.4th at p. 1173.) "We cannot and will not create a term of a contract between the parties that the evidence does not show was ever agreed upon by the parties. [Citation.] Taken as a whole, the documents submitted by defendants in support of their motion do not constitute an arbitration agreement." (Ibid.) The same principle is controlling here. Like the acknowledgment in Mitri, the Acknowledgement in this case fails to include any reference to an agreement to abide by the arbitration provision referred to in the handbook.
While the Auto Club cites Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, that case does not stand for the proposition the Auto Club seems to believe it does. In Harris, the employer relied on an acknowledgment of receipt of a handbook. The acknowledgment stated: "'I hereby confirm and acknowledge receipt of [defendant's]: [¶] . . . Alternative Dispute Resolution Agreement for current employees; and . . . Personnel Policy Handbook.' The parties do not dispute that the personnel policy handbook is the Employee Handbook." (Id. at p. 377.) The arbitration agreement in Harris was attached as an appendix to the handbook. (Ibid.) That is a far cry from the facts here, where the handbook acknowledgment includes no mention of the arbitration agreement or policy.
While it is certainly preferable on every level for an employer to use a separate arbitration agreement signed by the employee, a handbook acknowledgement may be valid if, at a minimum, it calls attention to the fact that the employee is agreeing to a binding legal contract, not simply company information and policies. But the acknowledgement at issue here did not do so, and it was therefore fatally unspecific.
Indeed, this entire case might compel an observer to ask why the Auto Club, a large and sophisticated employer, does not require this.
In sum, we conclude the trial court erred by determining there was a valid agreement to arbitrate. In addition to the lack of a copy of the agreement before the court, there was no substantial evidence to support the Auto Club's contention that Estrada ever received a copy of the arbitration agreement, and the handbook itself was not sufficient. Arbitration, while a useful method of dispute resolution, requires consent, and an agreement to arbitrate was entirely absent here. C. Adequacy of the Record
Finally, the Auto Club argues we should affirm because Estrada did not provide a reporter's transcript. A reporter's transcript is not required in this case because the court's written order adequately provides a basis for review; accordingly, any "error appears on the face of the record." (Rule 8.830(b).)
III
DISPOSITION
The judgment is reversed. The trial court is directed to enter new orders denying the motion to compel arbitration and vacating the arbitration award. Estrada is entitled to his costs on appeal.
MOORE, J. WE CONCUR: BEDSWORTH, ACTING P. J. THOMPSON, J.