Doorandish v. Atlas Franchise West CA4/3

Filed 11/9/26 Doorandish v. Atlas Franchise West CA4/3 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE EVAN DOORANDISH, Plaintiff and Respondent, G065829 v. (Super. Ct. No. 30-2024- 01421328) ATLAS FRANCHISE WEST, INC., OPINION Defendant and Appellant. Appeal from an order of the Superior Court of Orange County, David A. Hoffer, Judge. Affirmed. Littler Mendelson and Noah J. Woods for Defendant and Appellant. Otkupman Law Firm, Roman Otkupman and Nidah Farishta for Plaintiff and Respondent.  Plaintiff Evan Doorandish electronically acknowledged receipt of a 98-page Team Member Handbook (handbook) when he began working for defendant Atlas Franchise West, Inc. (Atlas). The handbook acknowledgment did not mention an arbitration agreement, which was included at pages 12 through 14 of the handbook. The arbitration agreement stated it was a mandatory condition of employment and was followed immediately by a signature block. Doorandish did not sign the arbitration agreement. Doorandish subsequently filed a class action complaint against Atlas, asserting wage and hour and unfair business practices claims. Atlas moved to compel arbitration pursuant to the arbitration agreement in the handbook. The trial court denied the motion, finding Atlas failed to prove the existence of an agreement to arbitrate. On appeal, Atlas contends Doorandish accepted the arbitration agreement either by signing the handbook or continuing his employment. We reject these contentions and affirm. STATEMENT OF FACTS AND PROCEDURAL HISTORY I. ONBOARDING PROCESS Atlas is an Arizona-based franchisee of Jimmy John’s restaurants. It operates locations in numerous states, including California. Atlas employed Doorandish as an hourly employee at its Lake Forest location for some period between 2022 and 2024. Doorandish began his employment with Atlas in June 2022. As part of the onboarding process, Atlas required each new hire, including Doorandish, to create a password-protected account to access onboarding documents electronically; Doorandish did so. The 98-page handbook was among the electronically available documents. According to Atlas’s director of 2 human resources, “[t]he employee must open the Team Member Handbook and scroll through its pages to review it. . . . When the employee has reviewed the Team Member Handbook, a pop-up window appears prompting the employee to confirm receipt of the Team Member Handbook and stating it is the employee’s responsibility to read and become familiarized with its contents. The employee must then enter his or her electronic signature and then click a button for the signature to be recorded and documented in the [electronic] system.” A “Document Audit History” for the handbook indicates Doorandish uploaded the handbook and received the pop-up window on June 16, 2022. There is no dispute he electronically signed the handbook on June 25, 2022. II. ARBITRATION AGREEMENT AND OTHER HANDBOOK CONTENTS The “Introductory Statement” on page 2 of the handbook states the handbook “summarizes the policies and practices in effect at the time of publication” and “is intended to explain the terms and conditions of employment of all full and part-time employees and supervisors.” The table of contents lists the arbitration agreement as one of several “General Employment Policies.” The arbitration agreement appears on pages 12 through 14 of the handbook. By its terms, it “replaces all prior agreements regarding the arbitration of disputes and is the full and complete agreement relating to the formal resolution of disputes covered by this Agreement.” The arbitration agreement states it is governed by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), and requires arbitration of “any dispute, past, present or future, arising out of or related to” employment with Atlas or termination thereof, including wage and hour and unfair competition claims. The 3 arbitration agreement also contains a class action waiver requiring employees to pursue claims on an individual basis only. The arbitration agreement states, in bold type, “Entering into this Agreement is a mandatory condition of your employment at the Company. Your acceptance of employment, or continuing employment, with the Company after receipt of this Agreement constitutes mutual acceptance of this Agreement and the terms thereof by you and the Company. You have the right to consult with counsel of your choice concerning this Agreement.” The next provision of the arbitration agreement reiterates, in regular type, “By continuing your employment after receipt of this Agreement, you and the Company mutually accept its terms.” The only other purported agreement contained in the handbook— a non-disclosure agreement at pages 15 through 18—states that “By signing the Team Member Handbook Confirmation Receipt, you are agreeing to abide by the following agreement.” But the arbitration agreement contains no similar language. Instead, the arbitration agreement includes a signature block in bold type on page 14 of the handbook, immediately beneath the final provision of the arbitration agreement. It reads: “AGREED: Atlas, Inc. “AGREED AND RECEIVED: “EMPLOYEE NAME PRINTED: ____________________ “EMPLOYEE SIGNATURE: ____________________ “DATE: ______________________.” Doorandish did not fill in any of this information or sign this page. 4  The final two pages of the handbook, pages 97 and 98, are completely blank except for a signature line at the top of page 98. Doorandish electronically signed the handbook on June 25, 2022. III. COMPLAINT Doorandish filed a class action complaint against Atlas in August 2024. He asserted eight wage and hour causes of action under the Labor Code and one unfair competition cause of action under the Business and Professions Code. Doorandish sought compensatory and statutory damages and attorney fees. He demanded a jury trial. IV. MOTION TO COMPEL ARBITRATION Atlas filed a motion to compel arbitration in February 2025. In support of its motion, Atlas provided copies of Doorandish’s signed handbook, which it argued constituted an enforceable agreement to arbitrate the claims asserted in the complaint. Atlas contended Doorandish “expressly accepted the Arbitration Agreement by electronically signing the Team Member Handbook that contained the Arbitration Agreement” and the lack of a signature on the arbitration agreement itself was “of no significance in light of his signature on the Team Member Handbook.” Atlas alternatively argued Doorandish “impliedly assented to the Arbitration Agreement by his employment with Atlas after receiving it.” Atlas supported its motion with declarations from its director of human resources and counsel. Doorandish opposed the motion. He argued his acknowledgment of the handbook was insufficient to assent to the arbitration agreement, which facially required an additional signature. Doorandish further asserted Atlas did not instruct him to sign the relevant page or otherwise draw his 5 attention to the arbitration agreement. Doorandish argued these same factors precluded creation of an implied agreement to arbitrate. In a supporting declaration, Doorandish stated no one informed him the handbook contained an arbitration agreement or explained to him he would give up his right to jury trial by signing the handbook. In its reply, Atlas did not dispute Doorandish’s declaration testimony that no one told him the handbook included an arbitration agreement or he would relinquish his right to a jury trial by signing the handbook acknowledgment. Instead, it contended “none of those assertions are relevant.” V. RULING The trial court denied the motion to compel arbitration in a written ruling. The court found Atlas failed to carry its burden of showing the existence of an agreement to arbitrate by a preponderance of the evidence. The court found the separate signature block for the arbitration agreement suggested it was a stand-alone agreement, as did the language stating it was the full and complete agreement relating to dispute resolution. The court further found the handbook acknowledgment Doorandish signed did not reference the arbitration agreement and Atlas provided no other notice of the agreement. It concluded the “evidence thus establishes that either Plaintiff intentionally elected not to sign the arbitration agreement or was not given adequate notice of it; thus, the court cannot imply Plaintiff’s mutual assent to the agreement.” 6  DISCUSSION Atlas contends Doorandish expressly assented to the arbitration agreement by signing the handbook or impliedly assented to it by continuing his employment. We disagree. I. LEGAL PRINCIPLES AND STANDARD OF REVIEW “The FAA reflects a policy favoring arbitration, requiring that agreements to arbitrate be enforced in the same manner as any other contract.” (Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1128.) Yet even under the “‘liberal federal policy favoring arbitration agreements’” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 235 (Pinnacle)), “‘“a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.”’” (Id. at p. 236; see also ibid. [“arbitration under the FAA ‘is a matter of consent, not coercion’”].) The threshold question in resolving a motion to compel arbitration accordingly is whether an agreement to arbitrate exists. (Santana v. Studebaker Health Care Center, LLC (2026) 120 Cal.App.5th 1, 11 (Santana).) The trial court answers this question by looking to general principles of California contract law. (See Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1128.) State contract law applies “even when it is alleged that the agreement is covered by the FAA.” (Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4th 676, 683.)1 1 This dispenses with Atlas’s argument the FAA is relevant to the threshold question whether Atlas sustained its burden of showing the existence of an agreement to arbitrate. 7  “Under California law the basic requirements for an enforceable contract are (1) parties capable of contracting, (2) the consent of those parties, (3) a lawful object, and (4) adequate consideration.” (Santana, supra, 120 Cal.App.5th at p. 11; see also Civ. Code, § 1550.) Consent is the only element at issue here. “The consent of the parties to a contract must be free, mutual, and communicated by each to the other.” (Santana, at p. 12.) To determine whether consent is mutual, the court applies an objective standard to the parties’ outward manifestations or expressions, examining the reasonable meaning of their words and acts. (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 777 (Mendoza).) The court also considers the nature of the transaction; regardless of apparent manifestation of assent, a party may not be bound by inconspicuous contractual provisions contained in a document whose contractual nature is not obvious. (Herzog v. Superior Court (2024) 101 Cal.App.5th 1280, 1293–1294.) Arbitration agreements generally must be memorialized in writing. (Pinnacle, supra, 55 Cal.4th at p. 236.) A party may manifest assent expressly by signing the agreement, even if he or she did not read the arbitration clause. (Ibid.) However, a signed agreement is not necessary to form a binding arbitration contract. (Ibid.) A party’s acceptance may be implied in fact. (Ibid.) California law “permits employers to implement policies that may become unilateral implied-in-fact contracts when employees accept them by continuing their employment.” (Asmus v. Pacific Bell (2000) 23 Cal.4th 1, 11.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense. . . .” (Pinnacle, supra, 55 Cal.4th at 8 p. 236.) The standard of proof is preponderance of the evidence. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) An order denying a motion to compel arbitration is appealable. (Code Civ. Proc., § 1294, subd. (a).) “There is no uniform standard of review for evaluating a trial court’s order granting or denying a motion to compel arbitration.” (Herzog v. Superior Court, supra, 101 Cal.App.5th at p. 1294.) “If the court’s order is based on a decision of fact, we adopt a substantial evidence standard. [Citation.] If the court’s ruling rests solely on a decision of law or on undisputed facts, we apply a de novo standard of review.” (Ibid.) “Where, as here, the evidence is not in conflict, we review the trial court’s denial of arbitration de novo.” (Pinnacle, supra, 55 Cal.4th at p. 236.) II. ATLAS FAILED TO ESTABLISH MUTUAL ASSENT A. There is No Express Assent Atlas argues Doorandish expressly assented to the arbitration agreement by electronically signing the handbook in which it was contained. Atlas relies primarily on Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373 (Harris). In Harris, the employee received an employee handbook containing an arbitration policy when he began his employment. (Harris, supra, 248 Cal.App.4th at pp. 377–378.) The handbook summarized the policy, which it described as “binding” and “mandatory,” and stated the employee would be deemed to consent to the policy by receipt of the handbook and commencement of work. (Id. at p. 378.) The handbook also referred the employee to “Appendix A,” which contained the “complete summary of the Company’s policy on mandatory binding arbitration,” and to “the Agreement to Arbitrate, a copy of which you will be required to execute prior to 9 employment with the Company.” (Ibid.) The employee acknowledged in writing receipt of the handbook and appendix A; both documents were expressly mentioned in the form he signed. (Id. at p. 377.) The employee later sued the employer, which moved to compel arbitration of the claims. (See Harris, supra, 248 Cal.App.4th at pp. 376– 377.) The employee opposed the motion, arguing there was no agreement to arbitrate because his signature on the handbook “only acknowledged receipt of documents” and he did not separately sign the arbitration agreement. (Id. at p. 379.) The trial court denied the motion, but the Court of Appeal reversed. (See id. at pp. 376, 380.) The Court of Appeal concluded the employee assented to the arbitration agreement by acknowledging its receipt in writing and continuing his employment. (See id. at p. 381.) The court emphasized “the arbitration agreement . . . was specifically highlighted in the signed acknowledgement form as the appendix to the Employee Handbook.” (Id. at p. 383.) It further found the handbook “expressly addresses the situation where an employee fails to execute the arbitration agreement and accepts employment.” (Id. at p. 385.) Harris is distinguishable from this case. Unlike here, the handbook acknowledgment form in Harris expressly referred to the arbitration agreement. Whether the acknowledgment form of an employee handbook mentions arbitration is a key factor courts consider in determining whether an agreement to arbitrate exists. (Mendoza, supra, 75 Cal.App.5th at p. 785.) When “any reference to an agreement by the employee to abide by the employee handbook’s arbitration agreement provision” is “[c]onspicuously absent from the acknowledgement receipt form,” courts are disinclined to find an agreement to arbitrate exists. (Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 1173 (Mitri); see also Mendoza, at p. 785 [collecting cases].) 10 “Merely agreeing to abide by all applicable rules and policies and to ‘read, observe and abide by’ the contents of the Handbook that ‘is designed for quick reference and general information’ does not constitute a contract and does not bind the employee to arbitration.” (Mendoza, at p. 786.) “‘To support a conclusion that an employee has relinquished his or her right to assert an employment-related claim in court, there must be more than a boilerplate arbitration clause buried in a lengthy employee handbook . . . . At a minimum, there should be a specific reference to the duty to arbitrate . . . in the acknowledgement of receipt form signed by the employee.’” (Ibid. [quoting Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511, 1522].) That minimum is not satisfied here. The electronic pop-up acknowledgment Doorandish signed at best confirmed his receipt of the handbook and stated it was his responsibility to read it. Atlas did not present any evidence the pop-up mentioned the arbitration agreement, let alone acceptance thereof. The handbook itself likewise did not contain any language regarding arbitration near the acknowledgment; the final two pages were blank aside from the electronic signature line. Atlas challenges the trial court’s characterization of the arbitration agreement as “‘buried’” in the handbook and contends it had no obligation to highlight or call attention to the arbitration agreement. Whether or not the three-page arbitration agreement is accurately characterized as “buried” in the 98-page handbook, it plainly is structured in such a manner as to function as a stand-alone agreement separate from the handbook. It has its own title (“ARBITRATION AGREEMENT”), an integration clause stating it is the “full and complete agreement relating to the formal resolution of disputes,” and a signature block for the employee to 11 indicate if he or she “agreed and received” the document. In Romo v. Y-3 Holdings, Inc. (2001) 87 Cal.App.4th 1153, 1159–1160, the Court of Appeal held that an arbitration agreement with similar indicia of independence from the handbook containing it required a separate assent. Such assent is absent here: it is undisputed Doorandish did not sign the arbitration agreement. Atlas seeks to distinguish Romo and another case, Gorlach v. Sports Club Co. (2012) 209 Cal.App.4th 1497, 1509 (Gorlach), on the basis the stand-alone arbitration agreements in those cases “told employees that they must sign the arbitration agreement, implying that it was not effective until (and unless) they did so.”2 (Gorlach, at p. 1509.) Atlas asserts the arbitration agreement here contains no such language. Atlas is correct about the lack of express language requiring a signature, but it overlooks the import of the arbitration agreement’s signature block. When interpreting a contract, we examine its entire contents in their ordinary and popular sense, giving effect to each part to the extent reasonably practicable. (See Mitri, supra, 157 Cal.App.4th at p. 1170.) The existence of a signature block with blank lines for the employee to sign and date strongly suggests a signature is required to assent to the agreement. (See Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 776, 805 [employee not bound by unsigned arbitration agreement contained within handbook].) We find the signature block particularly significant in light of the absence of an analogous requirement in the non-disclosure agreement, which provides for its acceptance via the handbook acknowledgment. To the extent 2 Atlas also asserts these authorities are distinguishable because they involve the California Arbitration Act (Code Civ. Proc., § 1280 et seq.), rather than the FAA. As discussed above, California contract principles govern the formation of an arbitration agreement. 12 the need for a signature to accept the arbitration agreement may be ambiguous, we interpret the agreement “most strongly against the party who caused the uncertainty to exist,” Atlas. (Civ. Code, § 1654.) Atlas asserts the absence of a signature is “of no legal consequence.” The authority on which it relies, Martinez v. BaronHR, Inc. (2020) 51 Cal.App.5th 962, 964, is distinguishable. In Martinez, the employer and employee both signed a stand-alone arbitration agreement, but failed to initial a line near a provision waiving jury trial. (See id. at p. 965.) The employer moved to compel arbitration when the employee filed suit, and the employee contended the absence of initials by the jury waiver demonstrated his lack of assent to that provision. (See id. at p. 966.) The Court of Appeal rejected this argument, finding the employee’s signature on the agreement constituted an unequivocal assent to all its terms. (See id. at pp. 967–968.) It further noted the “certification paragraph” immediately above the employee’s signature also contained a jury waiver, “prominently displayed in all capital letters.” (Id. at pp. 967–968.) In contrast, here there is no signature on the arbitration agreement and no mention of the arbitration agreement or any of its provisions in the handbook acknowledgment Doorandish signed. B. There is No Implied Assent Atlas alternatively contends Doorandish impliedly assented to the arbitration agreement by continuing his employment after receiving it. Atlas points to language in the arbitration agreement stating, “Your acceptance of employment, or continuing employment, with the Company after receipt of this Agreement constitutes mutual acceptance of this Agreement and the terms thereof by you and the Company.” As the trial court found, “this language is followed by a signature block suggesting [Doorandish’s] signature would be required to express 13 agreement to the arbitration agreement.” Even if it were not, “California law in this area is settled: [w]hen an employee continues his or her employment after notification that an agreement to arbitration is a condition of continued employment, that employee has impliedly consented to the agreement.” (Diaz v. Sohnen Enterprises (2019) 34 Cal.App.5th 126, 130 (Diaz), italics added.) In Diaz, on which Atlas primarily relies, the employer repeatedly notified the employee of the arbitration agreement and the effect of her continued employment. The employer held an in-person meeting at which it provided all employees, including Diaz, with a copy of its new arbitration policy. (See id. at p. 128.) The employer also orally explained to the meeting attendees that “continued employment by an employee who refused to sign the agreement would itself constitute acceptance of the dispute resolution agreement.” (Ibid.) After Diaz told the employer she did not wish to sign the agreement, it again advised her, in both English and Spanish, her continued employment constituted acceptance. (Ibid.) The Court of Appeal concluded the employer’s undisputed “evidence of the manner in which the agreement was presented to Diaz, and the actions which followed,” was sufficient to meet the employer’s burden of proving an implied agreement to arbitrate. (Id. at p. 129.) Notably, Diaz distinguished both Mitri, supra, 157 Cal.App.4th 1164, and Gorlach, supra, 209 Cal.App.4th 1497, two cases we find more factually analogous here. Diaz concluded the “general acknowledgement” of handbook receipt in Mitri “stands in distinction to the express explanation provided twice to Diaz: that continued employment would itself be a manifestation of agreement to the arbitration provisions.” (Diaz, supra, 34 Cal.App.5th at p. 130.) It found Gorlach distinguishable because “the handbook provided to employees contained an express signature requirement for the arbitration agreement,” which the employee never signed. (Diaz, at p. 14 130.) As discussed above, the signature block on the arbitration agreement here similarly functioned as an express signature requirement. We are also unpersuaded by Atlas’s reliance on Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416. In Craig, the employer mailed the employee copies of its arbitration policy on two separate occasions. (See id. at pp. 420–421.) The policy expressly stated it applied to all employees. (See id. at p. 419.) The employee continued to work for the employer for several years after receiving the policy. (See id. at p. 422.) The Court of Appeal concluded this constituted implicit agreement to the policy. (See ibid.) The only notice Atlas provided Doorandish, however, was the handbook. Atlas also looks to Harris, supra, 248 Cal.App.4th 373 to support its contention Doorandish impliedly assented to the arbitration agreement by continuing his employment. As already discussed, however, the employee in Harris specifically acknowledged receiving both the handbook and the arbitration agreement, which was also called to his attention as a separate document. (See Harris, at p. 383.) This explicit assent to the arbitration agreement buttressed the employee’s implicit assent. No such express assent is present here, and we are not at liberty to “create a term of contract between the parties that the evidence does not show was ever agreed upon by the parties.” (Mitri, supra, 157 Cal.App.4th at p. 1173.) 15  DISPOSITION The order is affirmed. Doorandish shall recover costs on appeal. GOODING, J. WE CONCUR: MOTOIKE, P. J. DELANEY, J. 16