2018-00240936-CU-OE

Margaret Campana vs. Cappo Management XXIX, Inc.

Nature of Proceeding: Motion to Compel Arbitration

Filed By: DuCharme, Michelle L.

This matter was originally scheduled for 12/13/2018. The court continued the matter to 12/18/2018, however, the parties requested that the matter be continued to 12/19/2018. Due to court error, the tentative ruling was

inadvertently posted to the 12/18/2018 calendar. The tentative ruling is posted here again for convenience. Any request for oral argument must still be made by 4:00 p.m. on Tuesday, 12/18/2018.

Defendant CAPPO Management XXIX, Inc. dba Harrold Ford’s motion to compel arbitration is ruled upon as follows.

Overview

In this action, Plaintiffs Margaret Campana (“Campana”) and Dianna Brock (“Brock”) (collectively “Plaintiffs”) are suing their employer for various Labor Code violations for unpaid overtime compensation; failure to pay compensation for forfeited meal and rest periods; failure to maintain employment records as required by the California Labor Code; damages under California Labor Code § 226 for failing to provide adequate pay stubs; unfair competition under California Business & Professions Code § 17200, et

seq.; failure to timely pay wages pursuant to California Labor Code §§ 201, 202, and 203; and unjust enrichment. Plaintiffs also seek penalties pursuant to the Private

Attorney General Act (“PAGA”). The B&P §17200 cause of action is brought individually and as a representative claim. The PAGA cause of action is brought on behalf of Plaintiffs and similarly situated employees.

Defendant moves to compel Plaintiffs to individually arbitrate all of their claims and to stay the entirety of the action pending completion of arbitration, and specifically staying Plaintiffs’ claims under PAGA.

Plaintiffs’’ objections to the declaration of Myrna Maddison are OVERRULED.

As a preliminary matter, the Court notes that Plaintiffs do not dispute whether their action falls within the arbitration agreement, nor do they argue that the arbitration agreement was unconscionable. The only argument Plaintiffs make is that they did not sign the arbitration agreement. Thus, the Court will only address this argument.

Analysis

California has adopted the Uniform Electronic Transaction Act (“UETA”) codified at Cal. Civ. Code § 1633 et seq. The UETA provides that “An electronic record or electronic

signature is attributable to a person [as] if it was the act of the person.” Espejo v. Southern California Permanente Medical Group (2016) 246 Cal. App. 4th 1047, 1061, reflects the proposition that an electronic signature made by plaintiff on an employment arbitration agreement is enforceable. The Espejo ruling was based on the employer’s declarations which described the actions required by the plaintiff to electronically sign the agreement. There, the court relied on declarations which set forth details regarding the electronic review and signature process for employee agreements; the security precautions regarding transmission (including the use of applicant’s unique password); and the actual steps an applicant would have to take to place his or name on the signature line of the agreement. (Id. at 1061-62.) Again, “An electronic record or

electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner ….” (Civ. Code § 1633.9, subd. (a); see Ni v.

Slocum (2011) 196 Cal.App.4th 1636, 1647 [“the Legislature has, through these provisions, expressed general approval of the use of electronic signatures in commercial and governmental transactions …”].) In Espejo, the court found that in light of the foregoing procedures, the electronic signature on the agreement was, indeed, that of the plaintiff.

To support its argument that Plaintiffs signed the arbitration agreement, Defendant proffers the declaration of Myrna Maddison (“Maddison”) in support of and in reply to the motion. Pursuant to Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060, the Court may consider the supplemental declaration since Defendant was not required to establish the authenticity of Plaintiffs’ signature until Plaintiffs challenged it in their opposition.

Maddison is the Director of Human Resources for Victory Automotive Group, which operates Defendant Cappo Management XXIX, Inc. d/b/a Harrold Ford’s management group, and has held the position since February 24, 2011. (Declaration of Myrna Maddison (“Maddison Decl.”), ¶ 2.) Defendant made the Arbitration Agreement available for review by employees, including Plaintiffs, though a third-party website, Compligo. (Id. at ¶ 5.) Defendant uses Compligo for onboarding as well as acknowledgment and retention of personnel documentation. (Id. at ¶ 6.) As with all employees, Plaintiffs accessed the Arbitration Agreement by logging into Compligo using their unique username password. The username and password is unique because each employee creates his own username password. Thus, not even Defendant has access to the private password that each employee creates. (Id. at 7.) Once logged into the Compligo software, Plaintiffs were able to view the Arbitration Agreement by clicking on the document. (Id. at ¶ 8.) Plaintiffs signed the Arbitration Agreement by entering their unique usernames and passwords on the Compligo website, acknowledging and agreeing that their electronic signature is equivalent of their handwritten signature. (Id. at ¶ 9.) All employees, including Plaintiffs, are required to use their unique username and password when they log into Compligo to sign documents using electronic signatures. Employees affirmatively agree to use an electronic signature when signing a document electronically. (Id. at ¶ 10.) The date printed next to the electronic signature indicates the date that the Arbitration Agreements were signed. This information was captured by Compligo and stored electronically within the software. (Id. at ¶ 11.)

Plaintiffs challenge whether they signed the arbitration agreement. Plaintiff Campana avers “[t]o my knowledge and understanding I did not sign an arbitration agreement during my employment.” (Declaration of Margaret Campana, ¶ 6.) “To my knowledge and understanding I did not sign the document referenced as Exhibit A to the Declaration of Myrna Maddison.” (Id. ¶ 7.) “If I did sign the document attached as Exhibit A to the Declaration of Myrna Maddison it was a mistake.” (Id. ¶ 8.) “I never consented to using electronic means to form an arbitration agreement. (Id. ¶ 9.)

Plaintiff Brock states “[t]o my knowledge and understanding I did not sign an arbitration agreement during my employment.” (Declaration of Dianna Brock, ¶ 6.) “To my knowledge and understanding I did not sign the document referenced as Exhibit A to the Declaration of Myrna Maddison.” (Id. ¶ 7.) “If I did sign the document attached as Exhibit A to the Declaration of Myrna Maddison it was a mistake.” (Id. ¶ 8.) “I never consented to using electronic means to form an arbitration agreement. (Id. ¶ 9.) She further explains “prior to January 26, 2018 I had given my supervisor Lisa Anderson a copy of ever) usemame and password combination that I was ever given by anyone at Harrold Ford. A redacted copy of the document containing these username and password combinations is attached hereto as Exhibit A.” (Id. ¶ 11.)

In response to Plaintiffs’ opposition, Defendant filed Maddison’s supplemental declaration. In her supplemental declaration, Maddison explains that in June 2017, all employees, including Plaintiffs, received an email from Compligo which provided them with basic information regarding how to log-in to Compligo using their unique username and temporary password. (Supplemental Declaration of Myrna Maddison, ¶ 4.) The online process requires the employees to review and electronically sign his or her employment-related agreements and personnel-related documents. (Id. ¶ 8.) After logging into Compligo using their unique username and password, Plaintiffs were directed to review and acknowledge and/or execute the documents in their “Inbox,” which included but was not limited to the Arbitration Agreement. (Id. ¶ 9.) Once logged into Compligo, Plaintiffs were able to view the Arbitration Agreement by clicking on the document in their “Inbox”. (Id. ¶ 12.) When employees log into Compligo and view the Arbitration Agreement, “Harrold Ford” is next to “Employer” directly under the signature line where each employee, including Plaintiffs, electronically sign the agreement. (Id. ¶ 13.) Plaintiffs signed the Arbitration Agreement by (1) “checking” the box which states that “By entering my password below, I confirm that I have read and understand this policy” and (2) entering their unique password immediately below where the page says “Password (as e-signature)”, thus acknowledging and agreeing that their electronic signature is the legal equivalent of their handwritten signature. Both steps must be completed in order for the Arbitration Agreement to be deemed completed by an employee and routed to management for signature. (Id. ¶ 14.) The electronic signature process in Compligo ensures that Plaintiffs’ electronic signatures could only have been placed in the location in the Arbitration Agreements where the page says, “Signed By” under “Password (as e-signature)”. (Id. ¶ 15.)

As part of Compligo’s service, employees receive automatically-generated emails that are sent on a weekly basis every Friday afternoon which list the outstanding items for their review and electronic signature. As the Director of Human Resources for Victory Automotive Group, which operates as Defendant’s management group, Maddison is familiar with this service and the automatically-generated emails that are sent to Defendant’s employees, including Plaintiffs. (Id. ¶ 18.) On December 22, 2017, Campana received an automatically-generated “Weekly Compliance Update” email listing the Arbitration Agreement as one of the documents in her Inbox that needed to be reviewed and signed-off. On or around December 26, 2017, Campana logged into

Compligo and accessed, viewed, and electronically signed the Arbitration Agreement. (Id. ¶ 19.) On December 22, 2017, Brock received an automatically-generated “Weekly Compliance Update” email listing the Arbitration Agreement as one of the documents in her Inbox that needed to be reviewed and signed-off. On December 26, 2017, Brock logged into Compligo and accessed the Arbitration Agreement, but did not electronically sign it. On December 29, 2017, and again on January 5, 12, and 19, 2018, Brock received automatically-generated “Weekly Compliance Update” emails listing the Arbitration Agreement as one of the documents in her Inbox that needed to be reviewed and signed-off. Brock also received an automated compliance email on January 4, 2018 regarding the items in her Inbox. On or around January 26, 2018, Brock logged into Compligo and accessed, viewed, and electronically signed the Arbitration Agreement. (Id. ¶ 20.) Maddison also attaches summaries of Plaintiffs’ access to and electronic signature of the Arbitration Agreement in Compligo. (Id. ¶ 23-24, Exs. C-D.) Maddison also provides Plaintiffs’ time records showing that Campana and Brock were at work at the time they accessed and signed the Arbitration Agreement. (Id. ¶ 25, Exs. E-F.)

Similar to Espejo, the Court concludes that Defendant has sufficiently shown that Plaintiffs electronically signed the Arbitration Agreement. Plaintiffs’ statements that “to [their] knowledge and understanding” they did not sign the Arbitration Agreement, does not preclude a finding that they consented to arbitration. Such vague statements fail to affirmatively demonstrate that Plaintiffs did not actually create a user name or password or see an arbitration agreement but rather, they are merely weighed against the evidence offered by Defendant. After all, if a party could defeat an arbitration agreement simply by averring that “to [his/her] knowledge and understanding, [he/she] did not sign the arbitration agreement”, virtually no petition to compel arbitration would ever be successful. In actuality, to defeat a petition to compel based on a the lack of an agreement, the opposition must present evidence which is sufficient to enable the Court to conclude more likely than not that there was in fact never an agreement to arbitrate.

The Court rejects Plaintiffs’ argument that they did not consent to the use of electronic signature. As Maddison explains in her declaration, Plaintiffs signed the Arbitration Agreement by entering their unique usernames and passwords on the Compligo website, acknowledging and agreeing that their electronic signature is equivalent of their handwritten signature. (Maddison Decl at ¶ 9.)

The Court also rejects Plaintiffs’ attempt to rescind their signature by claiming it was a “mistake.” (Civ. Code §1633.10(2).) First, the Arbitration Agreement has an “opt-out” provision wherein Plaintiffs could have chosen to “opt-out” of arbitration within 30 days of signing the Arbitration Agreement. Plaintiffs did not “opt-out.” Second, Plaintiffs have not demonstrated that Civ. Code §1633.10 applies.

Civ. Code §1633.10(2) provides:

In an automated transaction involving an individual, the individual may avoid the effect of an electronic record that resulted from an error made by the individual in dealing with the electronic agent of another person if the electronic agent did not provide an opportunity for the prevention or correction of the error and, at the time the individual learns of the error, all of the following conditions are met:

(i) The individual promptly notifies the other person of the error and that the individual did not intend to be bound by the electronic record received by the other person.

(ii) The individual takes reasonable steps, including steps that conform to the other person’s reasonable instructions, to return to the other person or, if instructed by the other person, to destroy the consideration received, if any, as a result of the erroneous electronic record.

(iii) The individual has not used or received any benefit or value from the consideration, if any, received from the other person.

Here, Plaintiffs have not shown that the “electronic agent did not provide an opportunity for the prevention or correction of the error.” Third, case law squarely holds that “in the absence of fraud, overreaching or excusable neglect, that one who signs an instrument may not avoid the impact of its terms on the ground that he failed to read the instrument before signing it.” (Stewart v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1588.) “[A] contracting party is not entitled to relief from his or her alleged unilateral mistake under such circumstances.” (Id. at 1589.)

Given that the Court finds a valid arbitration agreement exists, the motion to compel arbitration is GRANTED. The action is STAYED pending arbitration.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.