Are Electronic Signatures the Same as Handwritten Signatures?

As discussed in the recent California Appellate Court decision in Ramirez v. Golden Queen Mining Company, LLC, Carlos Ramirez filed a class action lawsuit against his former employer alleging various violations of the Labor Code and unfair competition. The employer moved to compel arbitration.

The trial court denied the motion on the ground that the employer failed to demonstrate the existence of an executed arbitration agreement.

The employer appealed, contending it carried the initial burden of making a prima facie showing that a written arbitration agreement existed.

The employer also contended Ramirez’s statements that he did not recall being presented with or signing an arbitration agreement were insufficient to rebut its initial showing and create a factual dispute about the authenticity of a handwritten signature.

There is a split of authority among the Courts of Appeal as to what constitutes sufficient evidence to create a factual dispute about the authenticity of a handwritten signature on a document agreeing to arbitration.

The decision in Iyere v. Wise Auto Group concluded that an individual is capable of recognizing his or her handwritten signature and if that individual does not deny a handwritten signature is his or her own, that person’s failure to remember signing the document does not create a factual dispute about the signature’s authenticity.

Here, Ramirez’s declaration asserts he does not recall ever being presented with or signing an arbitration agreement.

The declaration, however, omited several significant facts.

First, the declaration failed to state whether Ramirez even reviewed the arbitration agreement, the related handbook acknowledgement, or any other documents purportedly signed by him and included in the employer’s moving papers. A review of those documents, the handwritten signatures, and the handwritten initials might have improved Ramirez’s recollection.

Second, the declaration did not address whether Ramirez recalled signing the handbook acknowledgement, which is the document relied upon by the employer to show his consent to arbitration. The acknowledgement included a bolded, underlined sentence stating he agreed to the terms of the arbitration agreement in the employee handbook.

Third, Ramirez’s declaration did not state, one way or the other, whether the handwritten signature on the handbook acknowledgement is his.

Based on these omissions, the appellate court concluded Ramirez did not rebut the employer’s initial showing that an arbitration agreement existed.

Appellant Golden Queen Mining Company, LLC (Queen Mining) is a California limited liability company that operates the Soledad Mountain gold and silver mine in Mojave, California. The open-pit mine operates 24 hours per day, 365 days per year. Queen Mining’s operations use equipment, explosives and chemicals obtained from sources outside California.

All the gold and silver recovered from the crushed ore is sold to a refinery outside of California. Based on its purchases and sales, Queen Mining contends its business operations involve interstate commerce and, therefore, the Federal Arbitration Act governs its arbitration agreements.

In 2019, Ramirez was hired by Queen Mining as a nonexempt hourly employee to perform electrical work. Ramirez’s employment ended in August 2022.

As part of Queen Mining’s onboarding process, new employees are provided with many documents including an employee handbook containing an arbitration agreement.

In October 2022, Ramirez filed a class action complaint against Queen Mining alleging causes of action for failure to pay overtime wages, pay minimum wages, provide meal periods, provide rest periods, pay all wages due upon termination, provide accurate wage statements, indemnify employees for expenses incurred in performing their jobs, and pay for vested, unused vacation time upon termination.

In 2023, Queen Mining filed a motion to compel arbitration and supporting declarations. The declaration of Latasha Marshall, Queen Mining’s human resources manager, asserted Ramirez signed an Arbitration Agreement on or about March 28, 2019.

Marshall attached as exhibits to her declaration copies of (1) a two-page arbitration agreement, (2) a handbook acknowledgement purportedly signed by Ramirez and dated March 28, 2019, and (3) six other documents purportedly signed by Ramirez and dated March 28, 2019.

Ramirez opposed the motion, contending that Queen Mining could not prove the existence of an arbitration agreement between the parties because (1) Queen Mining had failed to authenticate the proffered arbitration agreement, and (2) even if authentic, a signature on an employee handbook acknowledgement did not constitute valid assent to arbitration. 

When presented with a motion or petition to compel arbitration, a trial court must determine whether an agreement to arbitrate the controversy exists.

The party seeking arbitration has the burden of proving the existence of an arbitration agreement by a preponderance of the evidence. The agreement must be in writing to be valid and enforceable.

A written arbitration agreement does not necessarily need to be signed because a party’s acceptance may be implied in fact or be effectuated by delegated consent.

The party opposing arbitration bears the burden of proving by a preponderance of the evidence any defense to the agreement’s enforcement.

Whether the arbitration agreement is a legally enforceable contract is determined by applying general principles of California contract law. 

A signature manifesting assent to arbitration need not be on the arbitration agreement itself.

In Iyere, three employees who had been terminated by their employer filed a joint complaint alleging many employment-related causes of action. The employer filed a motion to sever the complaints and compel each plaintiff to submit his claims to individual arbitration. The trial court denied the motion, concluding the employer failed to prove the authenticity of the plaintiffs’ signatures on the arbitration agreements.

On appeal, the First District addressed whether the plaintiffs' evidence was sufficient to create a factual dispute shifting the burden of production back to the employer.

The employer’s moving papers included copies of arbitration agreements bearing the plaintiffs’ apparent handwritten signatures. The plaintiffs’ opposition papers included each plaintiff’s declaration stating that, on the first day of work, he (1) was given a stack of documents, (2) was told to quickly sign the documents so he could get to work, and (3) signed the stack of documents immediately and returned them.

Each declaration also stated: “ ‘I do not recall ever reading or signing any document entitled Binding Arbitration Agreement .... I do not know how my signature was placed on [the document].’ ” Each plaintiff further stated that if he had understood that the agreement waived his right to sue the employer, he would not have signed it.

The First District concluded the declarations did not create a factual dispute as to whether the plaintiffs signed the agreements, stating: The declarations explicitly acknowledge that plaintiffs signed a stack of documents and do not deny that the stack included the agreement.

Although plaintiffs state they do not recall signing the agreement, 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.

In the absence of any evidence that their purported signatures were not their own, there was no evidence that plaintiffs did not in fact sign the agreement.

The First District distinguished cases involving a plaintiff’s statement that he or she did not recall electronically signing an arbitration agreement because the individual’s inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so.

However, an individual is capable of recognizing his or her own personal signature. If the individual does not deny that the handwritten personal signature is his or her own, that person’s failure to remember signing is of little or no significance. 

Consequently, in Iyere, the First District concluded that, if a plaintiff presented with a handwritten signature on an arbitration agreement is unable to allege the signature is inauthentic or forged, the plaintiff’s failure to recall signing the agreement “neither creates a factual dispute as to the signature’s authenticity nor affords an independent basis to find that a contract was not formed.

Because Ramirez had the burden of producing evidence, we describe some seemingly obvious points that are omitted from his declaration.

First, Ramirez’s declaration did not state he reviewed the arbitration agreement and other documents attached to Marshall’s declaration. The idea that a witness’s inspection of a writing may refresh the witness’s memory is long established.

Here, Ramirez’s evidence does not allow the appellate court to discern whether he took the fundamental step of inspecting the arbitration agreement included in Queen Mining’s moving papers. It follows that whether such an inspection would have improved his ability to recall being presented with the arbitration agreement and related acknowledgement.

Second, Ramirez’s declaration did not state he examined any of the seven handwritten signatures on the documents that Queen Mining contended he purportedly signed.

Third, Ramirez’s declaration did not state he did not recall signing the “HANDBOOK ACKNOWLEDGEMENT,” which is the specific document relied upon by Queen Mining to manifest Ramirez’s assent to arbitration.

The distinction between a signed arbitration agreement and a signed acknowledgement is significant in the context of this case because Ramirez’s opposition papers explicitly raised that distinction.

Read literally, Ramirez’s broad representation that he did not recall ever being presented with an arbitration agreement implies either that his attorney did not have Ramirez review the arbitration agreement in Queen Mining’s moving papers before signing the declaration or that Ramirez did review the arbitration agreement but, due to a poor memory or some other reason, he could not recall it by the time he signed the declaration.

LESSONS:

1.         An individual’s inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so.

2.         However, an individual is capable of recognizing his or her own personal signature. If the individual does not deny that the handwritten personal signature is his or her own, that person’s failure to remember signing is of little or no significance.