Amid a host of recent court decisions on arbitration, a state appeals panel has found that claiming not to recall signing an arbitration agreement doesn’t stand up in court.
The unanimous decision, in Iyere v. Wise Auto Group, represents a win for the business community, said Tom Manzo, founder and president of the California Business and Industrial Alliance.
“You get signed arbitration agreements, and then people try to renege by saying I don’t remember signing this, which doesn’t make sense,” Manzo said. “And even then, a plaintiff attorney can accuse the employers of anything and everything, and employers are guilty until proven innocent.”
Manzo
The decision from California's First Appellate District reversed and remanded the Iyere case to Marin County Superior Court. In the case, the plaintiffs, who were employees at the auto group, sought to sue their employer for work-related claims. Wise Auto Group, however, invoked an arbitration agreement the company said the employees had signed, which would send their claims to arbitration and block their lawsuit. A Marin County judge denied the auto group's motion, backing the employees' assertions that they shouldn't be held accountable for agreements they don't remember signing.
But on appeal, the First District justices said the lower court was wrong, and the signatures are still valid, and the agreements may be binding.
“If a party confronted with his or her handwritten signature on an arbitration agreement is unable to allege that the signature is inauthentic or forged, the fact that that person does not recall signing the agreement neither creates a factual dispute as to the signature’s authenticity nor affords an independent basis to find that a contract was not formed,” the appellate decision states.
The Iyere decision was authored by Justice Stuart Pollak with concurrence from justices Tracie Brown and Jeremy Goldman.
A recent federal appellate decision on arbitration also determined that California can’t ban arbitration agreements in the workplace. The state had sought to restrict arbitration in 2019 with AB 51, but it was never implemented following the Chamber v. Bonta court challenge.
“I think that’s another good decision,” Manzo said. “California continually tries to disable arbitration, they try to circumvent federal law; they try to come up with all these ways of how California should be doing things differently than everybody else, and the reality is, anybody that's studied arbitration realizes arbitration is better, not only for the employer, it's better for the employee.”
The California Supreme Court also is scheduled to issue its Adolph v. Uber arbitration ruling in the next few months.
In view of last June’s U.S. Supreme Court decision in Viking River Cruises, which held that California’s PAGA (Private Attorneys General Act) is preempted by the Federal Arbitration Act, CABIA has been working to educate businesses on arbitration.
“Among other things It’s common sense; you reach quicker settlements, it’s not a costly court battle with attorney fees, and in reality, if an employee wants to work somewhere but they don’t want to sign an arbitration agreement, why wouldn’t they just go and work somewhere else?”