As we previously blogged about here, at least for now, mandatory, pre-dispute arbitration agreements for employees are enforceable in California. As employers begin to distribute arbitration agreements to employees, employers should consider requiring employees to provide handwritten, as opposed to electronic, signatures for these agreements. In the recent California Court of Appeal case Iyere v. Wise Auto Group, the Court explained that an "individual's inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so. However, an individual is capable of recognizing his or her own personal signature." By requiring a handwritten signature, employers can better ensure that a signed arbitration agreement will be enforceable in court.
In Iyere, a group of former employees brought employment law claims against their former employer Wise Auto Group ("Wise"). Wise filed a Motion to Compel Arbitration, and produced the arbitration agreements signed by the employees with hand-written signatures. In response, the former employees submitted declarations stating that they "do not recall ever reading or signing any document entitled Binding Arbitration Agreement or Employment Acknowledgment" and "do not know how my signature was placed on the document." The trial court denied Wise's Motion to Compel Arbitration after finding that the employer had failed to prove the authenticity of the handwritten employee signatures on the arbitration agreement. Wise appealed.
The Court of Appeal explained that the existence of an arbitration agreement is proven through a three-step burden shifting process. In the first step, the proponent of arbitration, typically the employer, should produce a copy of the arbitration agreement signed by the employee. The burden then shifts to the employee to produce admissible evidence of a factual dispute as to the agreement's existence, including the authenticity of his or her signature. If the employee can create a factual dispute, the burden of proof shifts back to the employer to show, by a preponderance of the evidence, the authenticity of the signature.
In Iyere, the Court of Appeal concluded that, because the arbitration agreements contained handwritten signatures, and the employees admitted they had signed a "stack of documents," the employees had not created a factual dispute as to whether they signed those agreements. In contrast, the Court of Appeal pointed out that "[a]uthenticating an electronic signature if challenged can be quite daunting." More importantly, the Court of Appeal stated that an employee's inability to recall if he or she electronically signed an arbitration agreement might be evidence that the agreement wasn't signed, and shift the burden of proof back to the employer to show the authenticity of the signature. Employers can reduce this risk by requiring employees to provide handwritten signatures to arbitration agreements.
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