Shawn Socoloff v. Lrn Corporation , 646 F. App'x 538 ( 2016 )

FILED
NOT FOR PUBLICATION MAR 28 2016
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SHAWN SOCOLOFF, an individual, No. 13-57064
Plaintiff - Appellee, D.C. No. 2:13-cv-04910-CAS-
AGR
v.
LRN CORPORATION, a Delaware MEMORANDUM*
corporation,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted March 7, 2016
Pasadena, California
Before: PREGERSON, PAEZ, and NGUYEN, Circuit Judges.
LRN Corporation (“LRN”) appeals the district court’s denial of its motion to
compel arbitration of plaintiff Shawn Socoloff’s claims. We affirm.
The district court did not err in concluding that when Socoloff was hired, he
did not sign an agreement to arbitrate claims arising out of his employment with
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
LRN. Under California law, “[t]he party seeking arbitration bears the burden of
proving the existence of an arbitration agreement.” Pinnacle Museum Tower Ass’n
v. Pinnacle Mkt. Dev. (US), LLC, 282 P.3d 1217, 1224–25 (Cal. 2012). LRN’s
usual practice is to require all employees to sign a Mutual Agreement to Arbitrate
Claims. However, LRN failed to produce a signed copy of this document, nor
could the company produce a witness who observed Socoloff signing or returning
such a document. The district court therefore did not err in finding that LRN failed
to meet its burden of establishing the existence of an arbitration agreement.
In the alternative, LRN argues that Socoloff signed other documents which
incorporated the Mutual Agreement to Arbitrate Claims by reference. We agree
with the district court that LRN has failed to demonstrate valid incorporation by
reference. For the terms of one document to be incorporated into another, “the
reference must be clear and unequivocal, the reference must be called to the
attention of the other party and he must consent thereto, and the terms of the
incorporated document must be known or easily available to the contracting
parties.” Shaw v. Regents of Univ. of Calif., 67 Cal. Rptr. 2d 850, 856 (Cal. Ct.
App. 1997). Socoloff signed an offer letter which stated: “By signing this letter
below, you also agree to abide by all LRN policies, procedures, rules and
regulations currently in effect or that may be adopted from time to time.” The
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offer letter then explained that “[y]ou also will be required to sign a mutual
agreement to arbitrate claims.” Because the offer letter contemplated the future
signing of a separate arbitration agreement, there was no clear and unequivocal
incorporation by reference. See Mitri v. Arnel Mgmt. Co., 69 Cal. Rptr. 3d 223,
229-30 (Cal. Ct. App. 2007). Nor does the Confidentiality and Invention
Assignment Agreement (“Confidentiality Agreement”) signed by Socoloff obligate
him to arbitrate the claims presented in this lawsuit. The Confidentiality
Agreement specified that “[a]ll disputes regarding any breach of this agreement are
subject to the document ‘Mutual Agreement to Arbitrate Claims’ signed between
the Company and me.” Because this document only states that disputes arising
under the Confidentiality Agreement are to be resolved by arbitration (and because
Socoloff’s present claims do not involve the Confidentiality Agreement), it does
not govern the instant dispute.
We also agree with the district court that Socoloff’s continued employment
with LRN did not create an implied-in-fact agreement to arbitrate. Under
California law, an employee’s agreement to arbitrate employment-related claims
need not be express, and may be implied in fact. Pinnacle Museum Tower Ass’n.,
282 P.3d at 1224; see also Davis v. Nordstrom, Inc., 755 F.3d 1089, 1093-94 (9th
Cir. 2014). However, where an employee agrees to arbitrate Americans with
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Disabilities Act (“ADA”) claims or analogous state law discrimination claims, the
employee must at least be put on notice that continued employment constitutes
acceptance of an agreement to arbitrate. See Nelson v. Cyprus Bagdad Copper
Corp., 119 F.3d 756, 762 (9th Cir. 1997). Here, LRN did not notify Socoloff that
his continued employment alone would constitute acceptance of an agreement to
arbitrate. Accordingly, the district court did not err in finding no implied-in-fact
arbitration agreement.
For all of the above reasons, the district court properly denied LRN’s motion
to compel arbitration.
AFFIRMED.
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