Spencer v. Endless Pursuit Corp.

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TROVAN SPENCER, Plaintiff and Respondent, v. ENDLESS PURSUIT CORP. et al., Defendants and Appellants.

B316215

California Court of Appeals, Second District, Seventh Division

April 20, 2023

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County No 21STCV01599, Michael L. Stern, Judge. Reversed and remanded with directions.

Dermer Behrendt, Jeffrey D. Dermer; Theodora Oringher and Kenneth E Johnson for Defendants and Appellants.

Cummins & Franck, Scott O. Cummings and Lee Franck for Plaintiff and Respondent.

FEUER J.

Endless Pursuit Corp. (Endless), Seed Your Own, LLC, and William Herbe (collectively, the Endless defendants) appeal from an order denying their motion to compel arbitration of an employment action filed by Trovan Spencer. Although the trial court concluded in its initial order that Spencer had not electronically signed the Endless arbitration agreement, the court granted the Endless defendants' motion to compel arbitration. Then, following a motion for reconsideration the court denied reconsideration but entered a nunc pro tunc order correcting its prior order and denying the motion to compel arbitration.

On appeal, the Endless defendants argue the court erred in correcting its order absent a change in law or facts. They also contend the court erred because (1) Spencer electronically signed the arbitration agreement; (2) even if Spencer did not sign the agreement, there was an implied agreement to arbitrate; and (3) Spencer electronically signed a second arbitration agreement with Decision HR XXI, Inc. (Decision HR), a professional employer organization, which agreement required Spencer to arbitrate his claims against the Endless defendants. Because the evidence submitted by the Endless defendants compels the conclusion Spencer signed the arbitration agreement, and Spencer does not argue unconscionability on appeal, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Parties and Complaint

Endless is in the business of picking up and recycling or disposing of household junk in the Los Angeles area under the business name "1-800-Got-Junk?". Spencer was employed by Endless as a truck team member and driver from April 2018 until his employment was terminated in May 2020. William Herbe, a general manager of Endless, was involved in the hiring of Spencer.

On January 14, 2021 Spencer filed this lawsuit against the Endless defendants and Decision HR alleging 11 causes of action, including, among others, for disability discrimination, failure to accommodate, and hostile work environment in violation of California's Fair Employment and Housing Act (Gov. Code, § 12900 et seq.), interference with his right to medical leave and retaliation for his use of medical leave in violation of the California Moore-Brown-Roberti Family Rights Act (CFRA; §§ 12945.1, 12945.2), wrongful termination in violation of public policy, intentional infliction of emotional distress, and unfair competition (Bus. &Prof. Code, § 17200). Spencer alleged Endless, Seed Your Own, and Decision HR^[1] jointly employed Spencer, who was supervised by Herbe.

B. The Motion To Compel Arbitration

On March 9, 2021 the Endless defendants moved to compel arbitration pursuant to the arbitration agreement they asserted had been electronically signed by Spencer. Herbe attached the arbitration agreement to his supporting declaration. The agreement, dated April 9, 2018, states, "The parties to this Agreement agree to arbitrate any and all disputes, claims, or controversies . . . they may have against each other, including their current and former agents, owners, directors, or employees, which arise from the employment relationship between Employee and Employer or the termination thereof." The agreement provides as examples of covered claims those brought under FEHA and for wrongful termination.

Herbe explained that Endless uses an electronic system that allows an employee to review documents that must be signed before the employee is hired, including an arbitration agreement and acknowledgment of receipt of Endless's employee handbook. According to Herbe, the first step in the onboarding process is for the Endless representative to create an account for the employee using the employee's personal email address. The representative then sends an email to the employee's personal email address that enables the employee to select a password for the account known only to the employee. The company representative then selects the employment documents to be signed and sends them to the employee's account, and the system generates an email advising the employee that the Endless representative is requesting the employee sign the documents. Employment documents can be signed only using the employee's unique username and password. According to Herbe, an employee "will use the computer's mouse to click on the space where a signature is required," then a box appears, prompting the applicant to "'draw signature with mouse.'" After the employee and employer representative sign a document, it is moved to a "'[c]ompleted'" folder in the employee's account, and it can be reviewed by the employee at any time.

Herbe averred that he initiated the electronic signature process for Spencer's employment documents by electronically creating and sending the arbitration agreement and two other documents to Spencer's account on April 9, 2018. Herbe stated he was with Spencer on April 9 when Herbe logged into his computer with his own account and password, then logged out.

Spencer then used Herbe's computer to log into his account, select a password, and electronically sign the arbitration agreement and other employment-related documents. Herbe attached to his declaration a copy of the arbitration agreement and an electronically generated record from the "BambooHR" system showing that on April 9, 2018 at 10:11 a.m. Herbe used a 1-800-Got-Junk? email address to request Spencer sign the arbitration agreement; Spencer signed the arbitration agreement on the same day at 10:28 a.m. using a personal email account; and Nicole Zalazar signed the arbitration agreement on behalf of Endless on April 11, 2018 at 6:14 p.m. using an Endless email address. Herbe added that signing the arbitration agreement and other employment-related documents "is a necessary step to complete the hiring process and be entered into the payroll system."

In his opposition, Spencer argued he had not electronically signed the arbitration agreement. Spencer submitted a supporting declaration in which he stated he "did not see [the arbitration agreement] or any arbitration agreement when [he] applied for employment with [Endless]," and he "did not ever signing [sic] or acknowledging [sic] any agreement." He stated further, "I was unable to finish all of the 'onboarding' documents in one day due to technical difficulties with the BambooHR software. My managers got on the computer using my logged in account and tried to fix the issue. I was told to come back the next day to finish the paperwork, but when I left, my account had not been logged out ...." Further, he finished electronically signing the remaining unsigned documents the following day, but the arbitration agreement was not among the documents available for signature.

Spencer declared, "It was William Herbe who signed the Arbitration [Agreement]. He told me that he would sign the Arbitration Agreement for me. This is nothing new for William Herbe as he has a history of cutting corners, such as instructing his employees to take pictures of mattresses in such a way as to make it look as if it is a full load, when in fact it is not." Spencer added, "Even if I had signed it, I would not have signed it using my middle name. I do not include my middle name when signing documents, unless prompted by the document, which the [Arbitration] Agreement does not." In addition, Spencer stated, "I would not have signed the arbitration agreement if presented to me when I applied to [Endless]." Spencer attached a tenant income certification questionnaire (with the information redacted) that he had signed as Trovan Spencer. In his opposition, Spencer also argued the arbitration agreement was procedurally and substantively unconscionable, and therefore unenforceable.

On June 22, 2021 (six court days before the June 30 hearing) Decision HR submitted a joinder in the Endless defendants' motion to compel arbitration, with a supporting declaration from Barbie Cooper, Decision HR's human resources manager. Cooper averred Decision HR is a professional employer organization that provides online onboarding documents to its worksite employer clients on the "Apex (Summit) Human Resource software system." Cooper described the Decision HR onboarding process and opined, based on her review of Spencer's onboarding documents and Herbe's declaration, that Spencer electronically signed the Decision HR arbitration agreement on April 20, 2018 at 2:00 p.m. Cooper attached to her declaration the Decision HR arbitration agreement she stated Spencer signed.

In their reply brief, the Endless defendants argued Spencer had failed to rebut the showing made by the Endless defendants that Spencer signed the arbitration agreement on April 9 2018. Specifically, the arbitration agreement contained Spencer's typed signature, as shown on the arbitration agreement. The Endless defendants also argued that Spencer had signed all three employment documents on the BambooHR system using the name "Trovan Spencer," without his middle name, referencing three employment documents Herbe attached to his supplemental declaration (the arbitration agreement, a disclosure and authorization document, and an acknowledgment of receipt of the employee handbook). The Endless defendan...