Carlos Ramirez went to work at the Golden Queen Mining Company (Queen Mining) in Mojave, California, as a “nonexempt hourly employee” who was hired to do electrical work in October 2022. When he was hired, he was given an employee handbook that contained an arbitration agreement. When his employment ended, he filed a class action suit against the company alleging a series of “unconscionable acts,” including failure to pay him minimum wage, overtime, and unused vacation time. He also claimed he did not get meal or rest periods or accurate wage statements as required by various labor laws. Queen Mining responded with a motion to compel arbitration, as required in the employee handbook they claim Ramirez signed when he was hired.

The employee handbook contained a “HANDBOOK ACKNOWLEDGEMENT,” (capitals in original) which contained a bolded, underlined sentence stating the signatory agreed to the terms of the arbitration agreement.

Ramirez won at trial because Kern County Superior Court Judge David R. Zulfa ruled that Queen Mining failed to provide the court with a signed arbitration agreement. The gold and silver mining company appealed to the Court of Appeal Fifth Appellate District where a unanimous 3-0 panel found that Ramirez could not rebut Queen Mining’s claim that a valid arbitration agreement, signed by the appellant, actually existed. The May 15 opinion was authored by Justice Donald R. Franson with concurrences by Acting Presiding Justice Bert Levy and Justice Charles S. Poochigian.

Ramirez’s primary argument was that he did not remember being given or signing an arbitration agreement. Franson began the Fifth Appellate District’s opinion by explaining that California’s Courts of Appeal are split about what evidence is needed to “create a factual dispute about the authenticity of a handwritten signature on a document agreeing to arbitration.” Franson wrote that the Fifth District agreed with a ruling made by the First District Court of Appeal last year in Iyere v. Wise Auto Group (2023) that said that if a person is capable of recognizing his or her handwritten signature and does not deny that the signature is authentic, that person’s “failure to remember signing”… does not create a factual dispute about the signature’s authenticity.

Once the Iyere precedent was agreed to, Franson went on to find several problems with the arguments Ramirez presented in his declaration. First, the plaintiff/respondent never said whether he had reviewed the employee handbook and other Human Resource (HR) documents before filing his suit. Second, he never claimed he failed to recall signing the arbitration agreement. Third, he did not discuss whether the signature in the handbook was his. The opinion concluded, “… Ramirez did not rebut the employer’s initial showing that an arbitration agreement existed. We therefore reverse the order denying the motion to compel arbitration and remand for further proceedings to address Ramirez’s unconscionability defense.”

Franson’s opinion provides background on Queen Mining that explains that the company is bound by the Federal Arbitration Act (FAA), found at 9 U.S.C. § 1, because it ships the metals it mines to a refinery outside California, placing it in interstate commerce. The company’s motion to compel arbitration included a declaration by its HR manager that said Ramirez had signed the agreement. She also attached the agreement, the employee handbook signed by Ramirez, and six other relevant and purportedly signed documents.

The plaintiff objected, saying the arbitration agreement was not authenticated and even if it was, a mere signature in an employee handbook does not amount to valid consent to arbitration. He said he did not remember receiving or signing an arbitration agreement and, in fact, he did not know what it was until his lawyer explained it to him. He said that if he had known, he would not have signed it.

After his review of the factual and legal history of the case, Franson turned to the reason the court reversed Judge Zulfa’s ruling in Queen Mining’s favor. He wrote that first, the court must determine whether an agreement to arbitrate exists, and he noted that the party seeking to mandate arbitration has the burden of proving there is a legally enforceable agreement under California contract law. Franson then detailed the three-part process that would determine this. First, Queen Mining had to show there was a written agreement. Second, Ramirez would have to present enough evidence that challenged the authenticity of the written agreement. Third, Queen Mining had to prove that a valid contract existed by a preponderance of the evidence and that a valid contract to arbitrate existed.

A copy of the arbitration agreement, plus the testimony and documents provided by the company’s HR manager, satisfied the first criteria. Queen Mining’s documents included the sentence “My signature also acknowledges and certifies that I understand and voluntarily agree to terms of the Company Arbitration Agreement.” (Bold in original). In addition, the HR documents Ramirez signed said, “I understand that, because the Company cannot anticipate every issue that may arise during my employment, if I have any questions regarding the contents of the Handbook, I should consult Human Resources,” along with “I have carefully read this Acknowledgement.” The HR manager also provided a 19-item NEW HIRE ORIENTATION CHECKLIST (capitals in original) that Ramirez signed or acknowledged by signing his initials “CR.”

Ramirez failed to meet his responsibilities under California contract law that are required to create “a factual dispute about the existence of an enforceable agreement.” Primarily, this was because he did not produce sufficient evidence that the signature on the arbitration agreement was “inauthentic or forged.” He only said he did not remember seeing or signing it, that “no one ever told him about the agreement,” and that if he was informed about it, “he would not have signed it.”

The opinion concluded by explaining that Ramirez’s failure to present adequate evidence to challenge the agreement did not shift the burden back to Queen Mining. Franson then said, “…the trial should never have reached the third step in the burden-shifting framework.” Thus, he remanded the dispute for further proceedings so the court could consider Ramirez’s “unconscionability defense” about how he was treated and mistreated by his employer.