Employee’s Refusal to Initial Arbitration Provision in Employment Agreement Did NOT Prevent Enforcement of Arbitration Provision

 

Martinez v. BaronHR, Inc. - California Court of Appeal, Second Appellate District, Division Four

Facts:  Joseph Martinez (“Martinez”) was recruited by BaronHR, an employment staffing company, for an employment position with a company.  As part of the recruitment, Martinez was required to sign an employment agreement which included an arbitration provision, entitled “Mutual Agreement to Arbitrate Claims.”  This arbitration provision was several pages long and included a waiver of the right to a jury trial.  This section required that the employee initial this acknowledgement of the waiver of the right to a jury.  Martinez did not provide his initials following this section.  At the end of the employment agreement, there was an additional statement that the employee acknowledged and also stated:  “AFTER SIGNING THIS AGREEMENT, EMPLOYEE HAS NO RIGHT TO PURSUE CLAIMS AGAINST THE COMPANY IN COURT AND BEFORE A JURY, BUT ONLY THROUGH THE ARBITRATION PROCESS.”  Martinez signed the end of the employment agreement.

Martinez subsequently filed suit against BaronHR and alleged discriminatory and retaliatory mistreatment.  BaronHR moved to compel arbitration and Martinez opposed it.  Martinez claimed that an arbitration provision, requiring him to waive his right to a jury trial, was not beneficial to employees as a whole.  Consequently, he stated that is why he did not place his initials following the arbitration provision.  The trial court denied the motion to compel arbitration on the grounds that there was ambiguity about whether Martinez agreed to waive his right to a jury trial and consent to arbitration.

Holding:  The Court recognized that the issue in this case centered on consent, with the parties’ intent to be ascertained solely from the written agreement.

In this case, the Court pointed out that Martinez acknowledged that he had signed the employment agreement, and deemed to have assented to all of its terms.  In fact, at the end of the agreement was the prominent statement that the employee agreed to waive the right to a jury trial.  There was no dispute that Martinez had signed the agreement, right below this final waiver statement.

The trial court’s decision to give weight to Martinez’s statement that he did not believe the arbitration provision was beneficial to employees (and therefore the reason he did not initial this section) was found to have been improper.  As the language in the employment agreement was not vague or ambiguous, the Court held that considering the thoughts or impressions of Martinez, in an attempt to circumvent the plain language in the employment agreement, was improper.  Rather, the employment agreement set out that by signing, the employee agreed to waive their right to a jury trial.

Judgment:  The Court of Appeal reversed the lower court and held that BaronHR’s motion to compel arbitration found in the employment agreement should be granted, irrespective of the fact that the employee did not initial the arbitration provision. 

Majority Opinion Judge:  Judge Currey 

The Takeaway:  I wanted to flag this opinion for readers for a few reasons.  First, as the Court recognized, as there was no dispute over the language of the agreement (in regard to whether the language was vague or ambiguous), it was improper to consider the motives/reasoning of one of the parties.  Consequently, the plain language of the agreement controlled.  Second, had there been no “certification” statement at the end of the agreement, it is possible that Martinez could have avoided the arbitration requirement.  However, the fact that Martinez signed the agreement, directly below the statement that the employee acknowledged they waived the right to a jury trial and instead would submit their claim to arbitration, doomed his argument.  Keep in mind, many employment agreements contain a similar “certification” statement at the end of the agreement.  Just because an employee does not initial a particular section (or pages of the agreement), that does not necessarily mean the employee can circumvent particular provisions or portions of the agreement.  Look no further than this case for a clear example.

Date:  July 8, 2020

Opinion:  https://www.courts.ca.gov/opinions/documents/B296858.PDF