No Implied-In-Fact Arbitration Agreement Where Employee Had No Intention Of Signing

Gorlach v. The Sports Club Company, No. B233672 (Cal. App. 2d, Oct. 16, 2012): In Gorlach, the plaintiff was the former human resources director for Sports Club tasked with updating the employee handbook to include an arbitration agreement and collecting employee signatures on the arbitration agreements. During this process, she advised the chief operating officer that all but four corporate employees had signed the agreement, not mentioning that she was one of the four employees. Several weeks later she sent an email to several executives on the topic of the arbitration agreements and advised that some employees did not want to sign the agreement and were seeking advice on how to proceed. One week later, she resigned from her position. She later sued the employer for various employment-related disputes, and the defendants filed a motion to compel arbitration. The motion was denied by the trial judge on the basis that the plaintiff had not signed an arbitration agreement.

The defendant’s assertion that the plaintiff should be estopped from denying the enforceability of the arbitration agreement was rejected by the court based on the lack of evidence showing that the defendant would have terminated the plaintiff’s employment for failing to sign the agreement. The court also rejected the defendant’s argument for an implied-in-fact arbitration agreement, stating that the plaintiff never intended to sign the agreement evidenced by the fact that she resigned from her position. Thus, the court upheld the trial judge’s decision denying the defendant’s motion to compel arbitration.

Note: This article was published in the November 14, 2012 issue of the California eAuthority.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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