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Electronic Signature On An Arbitration Agreement Is NOT Necessarily Full Proof

 

Bannister v. Marinidence OPCO, LLC - California Court of Appeal, First Appellate District, Division Five


Facts:  Maureen Bannister (“Bannister”) worked for Marin Post Acute for many years when Marinidence took over operations of the workplace.  At the time it took over the facility, Marinidence claimed that Bannister had electronically signed an arbitration agreement when completing paperwork for new Marinidence employees.  A year after Marinidence took over operations, Bannister was filed.  Bannister subsequently filed suit and alleged discrimination, retaliation, defamation, and a few other claims.

Marinidence moved to compel arbitration based upon the arbitration agreement.  At the trial court level, Bannister presented evidence that she never saw the arbitration agreement and did not electronically sign it.  The trial court denied the motion to compel arbitration.  Marinidence appealed the trial court’s ruling.

Holding:  The Court of Appeal began its analysis of the case with a recognition to the fact that an appeal from a denial of a motion to compel arbitration turns on disputed facts (such as in this case), the trial court’s ruling is reviewed for substantial evidence.  In essence, the Court of Appeal would defer to the determination of credibility and judgment of the trial court.

In this case, Marinidence had presented evidence that Bannister signed the arbitration agreement at the time it was presented to her.  To access this online document, Bannister was required to have her Social Security Number and an employee PIN.  The argument followed that only Bannister would have had access to this information so she was the only one that could have electronically signed the arbitration agreement.  However, at the trial court level, Bannister presented evidence that the Marinidence HR department also had access to this same information and had electronically signed her name without her knowledge or approval.  Consequently, given this conflicting evidence and the burden on Marinidence, the Court was left with little room to do anything other than uphold the denial of the motion to compel arbitration.

Judgment:  The Court of Appeal held that based upon the trial court’s ruling in denying the employer’s motion to compel arbitration, the employer had not shown by a preponderance of the evidence (it was more than 50% likely) that the employee had electronically signed the arbitration agreement resulting in the denial of the motion to compel arbitration being upheld.

The Takeaway:  This case is a good example of why many employers have steadfastly insisted on employees actually putting pen to paper on employment policies/agreements rather than allowing for electronic signatures.  In this case, did Bannister actually electronically sign the arbitration agreement?  Maybe, maybe not.  However, based upon the burden on the employer and the fact that there was conflicting evidence that someone else might have electronically signed for her, I think the Court got it right here.

Bear in mind, had the trial court gone the other way, upheld the arbitration agreement, and had Bannister appealed, I think it is just as likely that the Court of Appeal would have upheld the motion to compel arbitration.  (Remember, what happens at the trial court level is often so imperative to how a court of appeals can/will rule.  Sometimes, even if a court of appeals might disagree with the trial court’s ruling, there is often very little leeway to setting aside a trial court’s ruling when it comes down to weighing the credibility of witnesses and testimony, when taking into account the burden of proof and standard of review.  Trial & appellate lawyers know this well.)

Date:  April 30, 2021

Majority Opinion Judge:  Judge Burns

Opinion:  https://www.courts.ca.gov/opinions/documents/A159815.PDF

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