Mendoza v. Trans Valley Transport, 75 Cal. App. 5th 748 (2022)

Summary: Arbitration provision in employee handbook, coupled with signed acknowledgement forms, did not establish agreement to arbitrate.

Facts: Plaintiff Jose Mario Mendoza, a Spanish-speaking former truck driver for Defendants Trans Valley Transport and FTU Labor Contractors Inc., filed a putative class action alleging various wage-and-hour violations. Defendants moved to compel arbitration and dismiss the class claims based on an arbitration agreement included in Defendants’ employee handbook. Plaintiff did not recall having received the handbook at all, and denied having received it in Spanish. Plaintiff did not deny having signed two forms upon his hire, one acknowledging that he would be required to abide by all policies in the handbook, and another acknowledging that he had received the handbook. The forms were both in English, and Plaintiff asserted that he could not read them and that nobody told him what they said, other than that he needed to sign them to work for Defendants. The trial court denied Defendants’ motion to compel arbitration. Defendants appealed.

Court’s Decision: The California Court of Appeal affirmed. The court first determined that Defendants had forfeited their right to have the arbitrator decide whether the parties entered into a contract to arbitrate, and that even if Defendants had not forfeited that right, the question was for the trial court, anyway. Turning to whether the arbitration provision included in the handbook, coupled with the acknowledgment forms, was sufficient to establish an express agreement to arbitrate, the court specifically noted: there was no place on the arbitration provision itself for Plaintiff to acknowledge his agreement to the provision in writing; nothing in the handbook drew the reader’s attention to the arbitration provision or distinguished it from other provisions, and certain stylistic elements in the handbook served to deemphasize the importance of the provision; and the handbook specifically stated that it was intended to be informational, not contractual, could be changed by the employer at any time, and did not create a contract of employment. The court also noted that the acknowledgment forms Plaintiff had signed (even if he had been able to understand them) did not mention arbitration. Ultimately, the court held that there was no express agreement to arbitrate, nor an implied agreement to arbitrate (the fact that Plaintiff received a copy of the handbook and continued working for Defendants did not establish an agreement to arbitrate).

Practical Implications: The legal landscape around employment arbitration agreements in California is always in flux, now more than ever. Employers should carefully consider how they present arbitration agreements and may wish to consult counsel about the potential impact of this and other recent employment arbitration developments.