Dina Murillo vs Santa Barbara Corporate Fitness, Inc. et al
Case No: 18CV04396
Hearing Date: Fri May 24, 2019 9:30

Nature of Proceedings: Motion to Compel Arbitration and Stay Proceedings

Tentative Ruling: The court denies defendants Santa Barbara Corporate Fitness, Inc., and Angel Banos’s motion to compel arbitration and stay proceedings.

Background: On September 6, 2018, plaintiff Dina Murillo filed her complaint for 1) sexual harassment, 2) failure to prevent sexual harassment, 3) retaliation, 4) wrongful discharge in violation of public policy, and 5) failure to allow inspection of personnel file against defendants Santa Barbara Corporate Fitness, Inc. (“SBCF”), a franchisee of Gold’s Gym, and Angel Banos (first and third causes of action only). On October 22, defendants answered the complaint. In February 2019, defendants substituted in new counsel and, on March 20, filed a motion to compel arbitration and stay proceedings. Defendants withdrew that motion and, on April 4, filed a new motion to compel arbitration and stay proceedings.

Motion: Defendants contend that, on September 17, 2016, Murillo executed an Employee Agreement to Arbitrate that commemorated the terms of Gold’s Gym Mutual Arbitration Policy. Murillo opposes the motion, contending that she never executed an arbitration agreement.

1. Request for Judicial Notice: Defendants ask the court to take judicial notice of two trial court decisions enforcing Gold’s Gym’s arbitration agreement. Whether an employee executed an arbitration agreement necessarily turns on the facts of the particular case. In the two trial court decisions, unlike Murillo, the employees did not contest the existence of the arbitration agreement. The court considers other courts’ decisions irrelevant and denies the request for judicial notice.

2. Analysis: Defendants contend that the Federal Arbitration Act (FAA) governs its agreement. Murillo does not dispute this contention. Under the FAA, “a gateway dispute about whether the parties are bound by a given arbitration clause raises a ‘question of arbitrability’ for a court to decide.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002). “The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence….” Engalla v. Permanente Med. Grp., Inc., 15 Cal.4th 951, 972 (1997).

a. Motion Evidence: In support of their motion, defendants offer the declaration of Chelsey Banos, Director of Field Support for Gym Management Services (“CB Dec.”). (Banos’s declaration includes bookmarks for the exhibits, as required by CRC 3.1110(f)(4), but only the first bookmark for Exhibit A is functional.)

In her declaration, Chelsey Banos states: Gym Management Services (“GMS”) manages a series of Gold’s Gym franchises, such as defendant SBCF. [CB Dec. ¶2] On September 17, 2016, Murillo, after being provided a copy of Gold’s Gym Mutual Arbitration Policy (“MAP”—Exhibit B) and Employee Agreement to Arbitrate (“EAA”—Exhibit C), read and acknowledged the arbitration policy via a computerized onboarding portal. This portal required Murillo to read and affirmatively agree to the MAP and EAA separately before signing electronically. [CB Dec. ¶3]

b. Opposition Evidence: In support of the opposition, Murillo submits her own declaration (“Murillo Dec.”) and the transcript of Chelsey Banos’s deposition (“CB Depo.”).

At her deposition, Ms. Banos testified that Murillo “did her new hire paperwork on October 1, 2016,” not September 17. [CB Depo. 8:15-22] GMS acquired Bay Club’s Gold’s Gym franchises and GMS had all Bay Club employees, numbering approximately 800, come to a meeting at a hotel to receive their final checks and, for those who were willing to transfer to GSM, to process new hire paperwork. [CB Depo. 8:24-10:1] GMS had ten laptop computers set up with the new hire paperwork on them. [CB Depo. 11:6-17] Other than the I-9 form (a federal employment eligibility verification form), all other “paperwork” was on the laptops. [CB Depo. 11:18-23]

Ms. Banos ran a test of her signature on the handbook, which prints out with a date and time stamp. [CB Depo. 13:5-18] Murillo’s would have “D. Murillo” and an IP address for the computer used. [CB Depo. 16:17-17:2] Either Ms. Banos or April Villamil would set each employee down at the laptop and explain that they would go through each tab to complete the paperwork. The explanation took 15 to 20 seconds. [CB Depo. 19:10-20:10]

Ms. Banos does not recall if copies of the employee handbook were brought to the meeting. [CB Depo. 21:10-15; CB Dec. Exhibit A]

Ms. Banos does not know that someone else did not electronically sign Murillo’s name to the paperwork at some other time. [CB Depo. 23:14-17] Ms. Banos does not recall if she mentioned an arbitration agreement to Murillo or to any other employee. [CB Depo. 23:18-24:3]

The EAA contains a signature block and the language: “The signed original copy of this agreement must be given to your supervisor and it will be filed in your personnel file; the other copies, and the manual, are for your personal records.” [CB Depo. 31:13-22; CB Dec. Exhibit C] There is no signed paper EAA for Murillo. [CB Depo. 31:20-22]

Banos said that Murillo agreed to the EAA “through the handbook” by clicking her name and signature. [CB Depo. 31:23-32:3] “She was signing off on the acknowledgment of receiving the handbook, which includes the arbitration agreement.” [CB Depo. 32:11-13] When asked whether Murillo had to sign the separate EAA, Banos answered, “No.” [CB Depo. 32:14-16] By typing her name and hitting “submit,” Murillo was agreed to both the handbook and the EAA. [CB Depo. 33:18-25]

Exhibit D to Ms. Banos’s declaration is the printed out electronic signature that Murillo provided. [CB Depo. 34:1-12] There is no date or computer ISP on Exhibit D but there is a date stamp “in our system.” [CB Depo. 34:13-24]] Exhibit D is entitled: “Review Task Summary; Dina Murillo; Task Name: Gold’s Gym SoCal Handbook.” The signature block reads: “Gold’s Gym SoCal Handbook; Please review the attached Employee Handbook; Attachment GMS Handbook 2016-08 Final (1) Signature: Dina Murillo.” [CB Dec. Exhibit D] Murillo had to open the handbook to sign her name and she could not be hired if she did not sign the document. [CB Depo. 42:21-43:4]

In her declaration, Murillo states: Her “onboarding” process with SBCF took place the morning of October 1, 2016 at a conference room at the Peppertree Hotel. [Murillo Dec. ¶2] When she arrived, there were approximately 15 people already in the conference room, including some employees along with two representatives from the Bay Club, whom she recognized as Rose and Amber; Chelsey Banos; and one other HR representative named Apryl. [Murillo Dec. ¶3] There were approximately ten laptop computers in the conference room. She was told she needed to click through some documents on the laptop in order to be onboarded in connection with SBCF’s purchase of Gold’s Gym from Bay Club, her former employer. [Murillo Dec. ¶4]

The onboarding meeting was chaotic and rushed. She was frequently unclear about the process. The connection to the laptops went down a few times. [Murillo Dec. ¶5] She did not get a chance to properly go over the documents. [Murillo Dec. ¶7] She was trying to make a good impression, so she hurried through the documents [Murillo Dec. ¶8] Nobody explained to her what each document was or its purpose. She was only directed to scroll down and date or fill in fields by either inputting initials or her name. [Murillo Dec. ¶9] She spent no more than ten minutes clicking through the various items on the laptop. [Murillo Dec. ¶13]

Murillo has no specific recollection of reviewing an employee handbook. She recalls that she did not read any multipage documents. [Murillo Dec. ¶14] Nobody told her that there was an arbitration agreement in the paperwork. [Murillo Dec. ¶15] She was never provided a copy of the handbook or any arbitration agreement. [Murillo Dec. ¶16] She was never made aware that an electronic copy of the handbook was available for her review. [Murillo Dec. ¶18]

c. Reply Evidence: With their reply, defendants submit Banos’s supplemental declaration (“Banos Supp. Dec.”) and more excerpts from Banos’s deposition. “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers.” Jay v. Mahaffey, 218 Cal.App.4th 1522, 1537 (2013) (anti-SLAPP motion). Declarations submitted with a reply should not address the substantive issues in the first instance but should only fill gaps in the evidence created by the opposition. Id. at 1538. A trial court has discretion to accept new evidence with reply papers, provided it permits the other party an opportunity to respond. Alliant Ins. Services, Inc. v. Gaddy, 159 Cal.App.4th 1292, 1308 (2008).

Elsewhere in her deposition, Banos clarified that, during the onboarding process, no one else could have logged in and completed the process as D. Murillo. Each employee was given a password to login by a person standing next to that employee. [Banos Depo. 50:12-25] The employee was identified by two forms of identification they brought in for the I-9 form, which was done simultaneously with the onboarding process. [Banos Depo. 51:13-21; 52:2-12]

In her supplemental declaration, Banos says: “A true and correct copy of the last screen with the slide bar fully extended that Plaintiff would have encountered while reviewing the Employee Agreement to Arbitrate is attached hereto as Exhibit E.” [Banos Supp. Dec. ¶2]

d. Conclusion: Defendants have not sustained their burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence. Chelsey Banos says that Murillo agreed to the EAA by acknowledging the handbook. But, notwithstanding Ms. Banos’s testimony to the contrary, the handbook does not include an arbitration agreement. While the handbook refers to something called the “Mutual Arbitration Agreement” [CB Dec. Exhibit A, p.4] and mentions the MAP [CB Dec. Exhibit A, p.13], it does not contain the MAP or EAA. The MAP and EAA are presented as separate exhibits. [Exhibits B and C] The electronic signature block, assuming it was executed by Murillo, indicates that she reviewed the handbook and nothing else. [Exhibit D] The handbook and EAA have separate signature lines. [Exhibit A, p. 40; Exhibit C] Even with the reply evidence, plaintiffs have not established the progression through the EAA at the onboarding event. Banos says that Exhibit E is a screen shot of the last page Murillo would have encountered while reviewing the EAA, but the only evidence is that Murillo reviewed the handbook, not the EAA.

3. Order: Because defendants have not sustained their burden of proving the existence of an arbitration agreement, the court denies defendants Santa Barbara Corporate Fitness, Inc., and Angel Banos’s motion to compel arbitration and stay proceedings.