Arbitration Agreement Not Binding Where Employee Resigned And Then Returned To Job Without Signing New Arbitration Agreement

CATEGORY: Private Education Matters
CLIENT TYPE: Private Education
DATE: Apr 25, 2024

Jasmine Vazquez began working for SaniSure through a staffing agency in July 2019.  She was hired directly by the company as an at-will employee that November.  As part of her hiring, she was given an arbitration agreement.  Subject to limited exceptions, she agreed that any claim she had against the company would be determined exclusively by binding arbitration.  Changes to these agreements, if any, could only be made in writing.

Vazquez resigned from her position in May 2021.  Four months later, she negotiated a new employment offer and returned to work for the company.  During negotiations, the parties did not discuss the arbitration agreements.  Vazquez’s second stint of employment with the company ended in July 2022.

In October 2022, Vazquez filed a class action complaint under the Private Attorneys General Act alleging that SaniSure failed to provide accurate wage statements during her second stint of employment.  The following month, SaniSure submitted a “cure letter” to Vazquez and the Labor and Workforce Development Agency (LWDA) indicating that they corrected their wage statements to comply with the Labor Code.  SaniSure also requested that Vazquez submit her claims to binding arbitration.

LWDA concluded that the violations had not been cured.  SaniSure moved to compel arbitration.  The trial court denied the motion, stating that the complaint arose out of Vazquez’s second stint of employment.  SaniSure failed to show that Vazquez agreed to arbitrate claims arising from that second stint, nor did the company show existence of an implied agreement to submit claims to arbitration during the second stint.  SaniSure appealed.

The Court of Appeals stated that the party seeking to compel arbitration bears the burden of proving that an agreement to arbitrate exists.  Here, the Court of Appeals found that Vazquez revoked the arbitration agreement when she resigned in May 2021.  Vazquez did not sign a second agreement when she returned to SaniSure and SaniSure failed to show that the parties agreed that the agreements Vazquez signed during the first stint would apply to her second stint.  Vazquez testified that she never agreed that the agreements she signed during her first stint of employment would govern her second.  She also said that SaniSure never told her that getting rehired was contingent upon agreeing to arbitration.  The documents Vazquez signed upon rehire did not mention arbitration.

The Court of Appeals upheld the trial court’s ruling.

Note: Schools should be aware that once this employee resigned, the prior arbitration agreement was no longer in effect.  Schools that do have arbitration agreements should make sure to ask rehired employees to sign them again.

Vazquez v. Sanisure, Inc. (Apr. 3, 2024) ___Cal.App.5th___ [2024 Cal. App. LEXIS 226].

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