Vazquez v. SaniSure ( 2024 )

Filed 4/3/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
JASMIN VAZQUEZ, 2d Civil No. B329219
(Super. Ct. No. 56-2022-
Plaintiff and Respondent, 00571632-CU-OE-VTA)
(Ventura County)
v.
SANISURE, INC.,
Defendant and Appellant.
An employer and employee can agree to arbitrate claims
related to their employment relationship. But termination of
that relationship can revoke the arbitration agreement. And
when there is no evidence that the parties agreed to arbitrate
claims arising from a subsequent employment relationship, any
claims arising solely from that subsequent relationship are not
subject to arbitration.
SaniSure, Inc., appeals from the trial court’s denial of its
motion to compel arbitration. SaniSure contends the court erred
when it concluded that arbitration agreements Jazmin Vazquez
executed during her first stint of employment with the company
did not apply during her second. We affirm.
FACTUAL AND PROCEDURAL HISTORY
Vazquez started working for SaniSure through a staffing
agency in July 2019. She was hired directly by the company as
an at-will employee that November. Her employment was “for no
definite period,” and either she or SaniSure could terminate the
employment relationship at any time.
As part of her hiring, SaniSure provided Vazquez with
onboarding documents, including agreements to “utilize binding
arbitration as the sole and exclusive means to resolve all disputes
that may arise out of or be related in any way to [her]
employment.”1 Subject to limited exceptions, she agreed that any
claim she had against the company would “be submitted to and
determined exclusively by binding arbitration.” She also agreed
to bring any claim individually, waiving her right to pursue a
class or collective action. Changes to these agreements, if any,
could be made only in writing.
Vazquez terminated her employment with SaniSure when
she resigned 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 whether Vazquez
would be required to sign arbitration agreements again or
whether claims related to her employment would be subject to
arbitration. Vazquez’s second stint of employment with SaniSure
ended in July 2022.
1 Vazquez does not recall signing these agreements, but
does not dispute that they appear to bear her signatures. The
trial court found that Vazquez signed them. Vazquez has not
filed a cross-appeal, and has thus forfeited any challenge to that
finding. (Celia S. v. Hugo H. (2016) 3 Cal.App.5th 655, 665.)
2
In October, Vazquez filed a class action complaint alleging
that SaniSure failed to provide accurate wage statements during
her second stint of employment. She also alerted both SaniSure
and the Labor and Workforce Development Agency (LWDA) of
her intent to add a derivative action under the Labor Code
Private Attorney Generals Act (PAGA) (Lab. Code, § 2698 et
seq.). The following month, SaniSure submitted a “cure letter” to
Vazquez and the LWDA claiming that its wage statements now
comply with the Labor Code. SaniSure also requested that
Vazquez submit her claims to binding arbitration.
In January 2023, Vazquez disputed that SaniSure had
cured the violations alleged in her complaint. The LWDA
ordered SaniSure to respond to Vazquez’s dispute letter. It
concluded that the violations had not been cured. SaniSure then
requested another opportunity to cure the violations. The LWDA
denied SaniSure’s appeal on February 14.
Three days later, SaniSure moved to compel arbitration.
The trial court denied the motion. All the claims in Vazquez’s
complaint arose out of her second stint of employment with
SaniSure. But SaniSure failed to show that Vazquez agreed to
arbitrate claims arising from that stint of employment. Nor did
the company show the existence of an implied agreement to
submit claims arising from that second stint to arbitration; the
agreement covering Vazquez’s first stint of employment
terminated in May 2021, and there was no evidence that the
parties intended it to apply thereafter.
DISCUSSION
SaniSure contends the trial court should have granted its
motion to compel arbitration because it showed the existence of
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an arbitration agreement covering Vazquez’s second stint of
employment. We disagree.
“The party seeking to compel arbitration bears the burden
of proving by a preponderance of the evidence [that] an
agreement to arbitrate a dispute exists. [Citations.] To carry
this burden of persuasion the moving party must first produce
‘prima facie evidence of a written agreement to arbitrate the
controversy.’ [Citations.] ‘If the moving party meets its initial
prima facie burden and the opposing party disputes the
agreement, then the opposing party bears the burden of
producing evidence to challenge the authenticity of the
agreement.’ [Citations.] If the opposing party produces such
evidence, then ‘the moving party must establish with admissible
evidence a valid arbitration agreement between the parties.’
[Citation.]” (Trinity v. Life Ins. Co. of North America (2022) 78
Cal.App.5th 1111, 1120, alterations omitted (Trinity).)
“ ‘[W]hen, as here, the [trial] court’s order denying a motion
to compel arbitration is based on the court’s finding that [the
moving party] failed to carry its burden of proof, the question for
the reviewing court is whether that finding was erroneous as a
matter of law.’ [Citations.] ‘ “Specifically, the question becomes
whether the [moving party’s] evidence was (1) ‘uncontradicted
and unimpeached’ and (2) ‘of such a character and weight as to
leave no room for a judicial determination that it was insufficient
to support a finding.’ ” ’ [Citations.]” (Trinity, supra, 78
Cal.App.5th at p. 1121.)
“ ‘ “ ‘Where . . . the judgment is against the party who has
the burden of proof, it is almost impossible for that party to
prevail on appeal by arguing the evidence compels a judgment in
that party’s favor. That is because unless the trial court makes
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specific findings of fact in favor of the losing party, we presume
the . . . court found the party’s evidence lacks sufficient weight
and credibility to carry the burden of proof. [Citations.] We have
no power on appeal to judge the credibility of witnesses or to
reweigh the evidence.’ ” ’ [Citation.]” (Gamboa v. Northeast
Community Clinic (2021) 72 Cal.App.5th 158, 166, alterations
omitted (Gamboa).) Nor can we “ ‘ “substitute [our] factual
determinations for those of the [court below]; [we] must [instead]
view all factual matters most favorably to the prevailing party
and in support of the judgment. [Citation.] ‘ “All conflicts,
therefore, must be resolved in favor of the [prevailing party].” ’ ” ’
[Citation.]” (Id. at pp. 166-167.)
Here, we cannot say that SaniSure’s evidence was so
uncontradicted, so unimpeached, and of such a character that it
left no room for a judicial determination that it was insufficient
to support the existence of an arbitration agreement governing
Vazquez’s second stint of employment. “An arbitration
agreement is tied to the underlying contract containing it.”
(Moritz v. Universal City Studios LLC (2020) 54 Cal.App.5th 238,
246 (Moritz).) Such an agreement can be revoked “upon such
grounds as exist for the revocation of any contract.” (Code Civ.
Proc., § 1281.) At-will employment contracts can be revoked upon
reasonable notice. (Consolidated Theatres, Inc. v. Theatrical
Stage Employees Union (1968) 69 Cal.2d 713, 727, fn. 12.)
Vazquez signed arbitration agreements during her first
stint of at-will employment with SaniSure. But she revoked
these agreements by terminating her employment in May 2021.
The causes of action in Vazquez’s lawsuit are based on events
that allegedly occurred only during her second stint of
employment with SaniSure. As SaniSure concedes, Vazquez did
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not sign a second set of arbitration agreements during that stint
of employment. Thus, for her claims to be subject to arbitration,
SaniSure must show that the parties agreed that the agreements
Vazquez signed during her first stint of employment would apply
to her second. (See Code Civ. Proc., § 1280, subd. (i) [arbitration
agreement can be extended by implied agreement]; see also
Litton Financial Printing Div. v. NLRB (1991) 501 U.S. 190, 205-
206 (Litton) [cause of action that arises after contract terminates
may be subject to arbitration if arbitration agreement survives
termination of the remainder of the contract].)
SaniSure has not done so. 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 on
agreeing to arbitration. And the documents she signed upon
rehiring do not mention arbitration. SaniSure points to no
evidence to the contrary. It has thus failed to carry its
“ ‘ “ ‘almost impossible’ ” ’ ” burden of showing that the trial court
erred as a matter of law when it denied the motion to compel
arbitration. (Gamboa, supra, 72 Cal.App.5th at p. 166.)
None of the cases SaniSure cites suggests a contrary
conclusion. SaniSure cites Vaughn v. Tesla, Inc. (2023) 87
Cal.App.5th 208, 223, for the proposition that arbitration
agreements may operate prospectively. But the Vaughn court
noted that prospective operation was required there because the
claims at issue had “ ‘their roots in the relationship between the
parties’ ”—a relationship that “ ‘was created by the contract.’ ”
(Id. at p. 221.) Here, Vazquez’s claims are rooted in her second
employment relationship with SaniSure, a relationship based on
a contract that SaniSure has not shown requires arbitration.
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SaniSure cites Franco v. Greystone Ridge Condominium
(2019) 39 Cal.App.5th 221, 223-224, Salgado v. Carrows
Restaurants, Inc. (2019) 33 Cal.App.5th 356, 361-362, and Desert
Outdoor Advertising v. Superior Court (2011) 196 Cal.App.4th
866, 877, for the proposition that arbitration agreements may
operate retrospectively. But Vazquez’s claims in this lawsuit are
not rooted in an employment relationship established by a
contract requiring retrospective application of an arbitration
agreement. More significantly, the employment relationships in
Franco, Salgado, and Desert Outdoor Advertising had not been
terminated when the employees signed the retrospectively
applicable arbitration agreements—language that required
arbitration of the employees’ claims. Because Vazquez
terminated her prior employment relationship with SaniSure in
May 2021, and did not sign an arbitration agreement during her
subsequent period of employment, there is no contractual
language requiring arbitration of her claims.
Ajida Technologies, Inc. v. Roos Instruments, Inc. (2001) 87
Cal.App.4th 534 is also inapposite. The Ajida court held that the
“contractual duty to arbitrate disputes may survive termination
of the agreement giving rise to that duty.” (Id. at p. 545.) We do
not disagree. (See Litton, supra, 501 U.S. at pp. 205-206.) But
the duty in Ajida was based on the language of a contract that
required the parties to submit claims to arbitration for five years
after their relationship terminated. (Ajida, at pp. 544-546.)
SaniSure points to no similar language in the arbitration
agreements here.
SaniSure’s attempt to distinguish Litton, supra, 501 U.S.
190, is similarly unavailing. In Litton, a collective bargaining
agreement that included an arbitration provision expired on a
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specified date. (Id. at pp. 193-194.) Here, in contrast, the
arbitration agreements Vazquez signed did not specify when they
would expire. To SaniSure, this renders Litton inapposite and
means that the agreements survived the termination of
Vazquez’s first stint of employment.
SaniSure misreads Litton. The relevant inquiry under
Litton is not how an arbitration agreement terminates; it is
whether the agreement survives termination of a contract—
regardless of whether that termination is on a specific date, as
was the case in Litton, or whether termination occurs due to the
actions of an employer or employee, as was the case here. (See
Litton, supra, 501 U.S. at pp. 205-206.) The trial court found that
SaniSure had not carried its burden of showing that the
arbitration agreements Vazquez signed survived the termination
of her first stint of employment. And SaniSure has not carried its
burden on appeal of showing that that finding was erroneous as a
matter of law. Reversal is accordingly unwarranted on this basis.
(Moritz, supra, 54 Cal.App.5th at p. 246 [courts cannot compel
“arbitration simply because the same parties agreed to arbitrate
a different matter”]; see also O’Connor Co. v. Carpenters Local
Union No. 1408 (9th Cir. 1983) 702 F.2d 824, 825 [no
requirement to arbitrate dispute that arose after arbitration
agreement expired].)
Finally, SaniSure’s reliance on cases holding that
employees who continue their employment after being notified
that an arbitration policy exists are bound by that policy (see,
e.g., Pinnacle Museum Tower Assn. v. Pinnacle Market
Development (US), LLC (2012) 55 Cal.4th 223, 236; Diaz v.
Sohnen Enterprises (2019) 34 Cal.App.5th 126, 130; Craig v.
Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420-422) is also
8
misplaced. Here, Vazquez did not continue her employment after
she was notified of SaniSure’s arbitration policy. She instead
terminated her employment with SaniSure in May 2021 and later
negotiated a new employment offer. And during those
negotiations she did not sign arbitration agreements. Nor was
she told that the agreements she signed during her previous
employment with SaniSure would apply to any new term of
employment. The trial court thus properly denied SaniSure’s
motion to compel arbitration.2
DISPOSITION
The trial court’s April 20, 2023, order denying SaniSure’s
motion to compel arbitration is affirmed. Vazquez shall recover
her costs on appeal.
CERTIFIED FOR PUBLICATION.
BALTODANO, J.
We concur:
YEGAN, Acting P. J. CODY, J.
2 Given our conclusion, we do not resolve whether SaniSure
waived its right to compel arbitration by litigating the merits of
Vazquez’s claims at the LWDA, whether the arbitration
agreements are unenforceable, or whether Vazquez’s PAGA claim
is subject to arbitration.
9
Matthew P. Guasco, Judge
Superior Court County of Ventura
______________________________
Fisher & Phillips, Todd B. Scherwin and Megan E. Walker
for Defendant and Appellant.
The Myers Law Group, David P. Myers, Jason Hatcher and
Andriana N. Bravo for Plaintiff and Respondent.