Court Holds Electronic Signature Not Enough to Compel Arbitration

In Ruiz v. Moss Bros. Auto Group Inc.,(2014) 232 Cal. App.4th 836, an auto parts company cannot enforce its agreement to arbitrate employment disputes individually in a class action case since  it failed to prove the authenticity of an employee's electronic signature on the agreement.

An official of Moss Bros. Auto Group failed to present sufficient evidence in her statement that the employee actually signed the agreement, the 4th District Court of Appeal said.

The appellate panel affirms a state court decision denying Moss Bros.' motion to compel arbitration of a wage-and-hour class action.

Automotive service technician Ernesto Ruiz filed the class action in the San Bernardino County Superior Court in July 2012, alleging Moss Bros. violates state labor laws by failing to pay overtime and by denying employees rest and meal breaks.  The claim included an action under the Private Attorney General Act as well ("PAGA").   

The company moved to compel individual arbitration based on an agreement it says Ruiz signed in 2011.  In support of its motion, Moss Bros. produced a declaration from its business manager, Mary K. Main, that said Ruiz electronically signed the agreement.

According to Main, each employee received the agreement and had to log in to the company's computer system with their ID and password to view and acknowledge the agreement.

Ruiz countered that he did not recall signing the agreement and said Main made “conclusory” statements and could not prove that he had signed it. Ruiz maintained that he would not have signed it if it had been presented to him.  Judge Pacheco of the trial court denied the company's motion, finding that it failed to show that an agreement existed with Ruiz. Moss Bros. appealed.

In affirming the decision, the appeals court concluded that Main's explanation of how employees acknowledged the agreement was insufficient given Ruiz's contention that he did not remember receiving and signing it.

The employees were required to sign the acknowledgement form of the 2011 agreement but they were free to examine it at their leisure while logged in to the system, the panel observed.

Main did not explain whether or how Moss Bros. verified that only Ruiz, using his “unique login ID and password,” could have placed his signature on the form, the panel said.

Another wrinkle to this case was there was no statement of decision, nor much of a record for the Court of Appeal. Litigants should consider using private Court Reporters such as Veritext or KWCourtreporting to make sure the record is clear for the court of Appeal. 

Department of Labor Reverses its Position on Exempt Status of Mortgage Loan Officers

Basically, for those of us who do class action work, the United States Department of Labor ("DOL") declared yesterday that commissioned loan officers are entitled to overtime pay. In so doing, it reversed a 2006 ruling that favored the mortgage firms that employed them. A DOL ruling in September 2006, requested by the Mortgage Bankers Association, classified Loan Officers as exempt "administrators" under the Fair Labor Standards Act. In its new ruling, however, the DOL found that a mortgage loan officer's primary duty is sales, which "falls squarely on the production side of the business" under the Administrative Exemption under Section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1).

This could be another major area for class actions, as the prevailing mode of compensating Mortgage Loan Officers in California remains one of "commission only." Quintilone & Associates and some associated law firms obtained a $16.65 million dollar class action settlement on behalf of a large group of mortgage loan officers. Please feel free to contact us at req@quintlaw.com if you have any questions about what this new opinion may mean for you.