Maureen Bannister was an office worker at a skilled nursing facility for approximately three decades when Marinidence Opco, LLC (Marinidence) purchased the facility. A year later, Marinidence terminated Bannister. She proceeded to file a suit against Marinidence alleging discrimination, retaliation, defamation, and other claims. In response, Marinidence moved to compel arbitration, alleging that, at the time it took over the facility, Bannister electronically signed an arbitration agreement when completing the paperwork for new Marinidence employees.
Marinidence presented evidence that to access the online onboarding portal, an individual had to enter their first and last name, social security number, as well as their “Client ID” and pin code. Once logged in, the individual employee had to complete a W-4 tax withholding form and provide emergency contact information prior to accessing the arbitration agreement. Marinidence claimed that, based on these requirements, Bannister was the only person who could have electronically signed the arbitration agreement.
Bannister submitted contradictory evidence that, when Marinidence purchased the facility, it had a short deadline by which to complete the purchase transaction to take over the facility. As a result, Marinidence rushed to hire 180 staff members employed by the prior nursing facility owners before the deadline. Bannister claimed there were no employee-specific user names or passwords required to access the onboarding portal; Marinidence never provided her with copies of any documents; she never saw an arbitration agreement, and the entire process took less than 10 minutes. Bannister also presented evidence that the human resources manager completed the onboarding process for other employees without their participation.
The trial court denied the motion to compel and concluded that Marinidence failed to meet its burden in establishing the authentication of an electronic signature under Civil Code Section 1633.9, which is part of the California Uniform Electronic Transactions Act. Civil Code Section 1633.9 requires that the party claiming an electronic signature is valid must make “a showing of the efficacy of any security procedure applied to determine the person to which the…electronic signature was attributable.” The Court of Appeal affirmed the trial court’s decision and stressed that it would not “second guess” the trial court’s factual determinations. Because Marinidence failed to rebut evidence that the human resources manager completed the onboarding process for other employees, as well as evidence that persons other than the employee could complete the form, the Court of Appeal was not in a position to disrupt the trial court’s factual determinations.
Bannister v. Marinidence Opco, LLC, et al. (2021) 64 Cal.App.5th 541.
NOTE:
When requiring employees to electronically sign an arbitration agreement, employers should ensure that the execution of the agreement is possible only by the employee in question. Employers should review their electronic signing processes to ensure that they meet the requirements of the California Uniform Electronic Transactions Act, which can be accomplished by various methods including the use of unique log-in ID and passwords created by the employee.