Arbitration Agreements Binding Without Remembering Handwritten Signatures

​Authenticating a handwritten signature on an arbitration agreement is easier than authenticating an electronic signature, a California appeals court recently said. The court found that the fact that employees claimed they did not remember signing the agreements was not enough to call their validity into question.

Three employees began working for an automobile dealership on separate dates in 2018 and 2019. They were fired in 2019. In 2021, they filed a joint complaint asserting 25 causes of action against the dealership, including claims for discrimination, harassment, retaliation and wrongful termination. The employer filed a motion to compel each plaintiff to submit his claims to individual arbitration pursuant to arbitration agreements it said the employees had signed on their respective start dates.

The agreements state that any workplace dispute will be submitted to and resolved through final and binding arbitration. They end with an acknowledgment that the employee has read the agreement carefully and understands that it is voluntary and that they "can choose not to sign this agreement and still become or remain employed by the company," without retaliation.

Accompanying its motion to compel arbitration, the employer submitted a declaration from its HR director, authenticating the arbitration agreements.

In opposition, each plaintiff signed a declaration alleging that, on his first day of work, he met with a company employee who handed him "a large stack of documents to fill out." The declaration further alleged that each plaintiff was not given any time to review the documents because the company manager told him to quickly sign the documents so he could get to work. Each plaintiff alleged that he signed the stack of documents immediately and returned them.

Each plaintiff further alleged that the company never gave him a copy of the documents he signed and that he first saw the arbitration agreement when his lawyer showed him the HR director's declaration. Each plaintiff alleged that he did not recall ever reading or signing an arbitration agreement and that he did not know how his signature was placed on the document.  

The trial court denied the company's motion to compel arbitration, holding, among other things, that the company failed to meet its burden of proving the authenticity of the plaintiffs' signatures. The employer appealed.  

Determining Whether an Arbitration Agreement Exists

The appeals court initially noted that if a party to an action asks the court to compel arbitration of the pending claim, the court must first determine whether an agreement to arbitrate the controversy exists.

The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, the court said. It noted that the company submitted copies of the agreements bearing plaintiffs' apparent handwritten signatures. In response, the court said, no plaintiff declared that he had not signed the agreement or that his physical signature was forged or inauthentic.

To the contrary, the court noted, each plaintiff declared that on his first day of work, he was given a stack of documents, was told to quickly sign the documents, signed the documents immediately and returned them.

This evidence, the court said, does not create a factual dispute as to whether plaintiffs signed the arbitration agreements. The declarations explicitly acknowledge that plaintiffs signed a "stack of documents" and do not deny that the stack included the arbitration agreement.

Although the plaintiffs said they do not recall signing the agreements, there is no conflict between their having signed a document on which their handwritten signature appears and, two years later, being unable to recall doing so, the court said. In the absence of any evidence that their purported signatures were not their own, there was no evidence that the plaintiffs did not in fact sign the agreements.

The court then distinguished cases involving electronic signatures from those involving handwritten ones. While handwritten and electronic signatures once authenticated have the same legal effect, the court said, there is a considerable difference between the evidence needed to authenticate the two.

An individual cannot confirm or deny the authenticity of an electronic signature by viewing a computer printout of the person's printed name followed by the words "(Electronic Signature)," the court said. In such a case, the individual's inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so.

However, an individual can recognize their own personal signature. If the individual does not deny that the handwritten personal signature is theirs, that person's failure to remember signing is of little or no significance, the court said.

The appeals court reversed the trial court's order and ordered the plaintiffs to proceed to arbitration.

Iyere v. Wise Auto Group, Calif. Ct. App., No. A163967 (Jan. 19, 2023).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.