California Court of Appeals Rules on Evidentiary Standard for Attributing an eSignature to the Signer

Electronic Signatures

On April 22, the California Court of Appeals, Second District, reversed a trial court decision denying a defendant employer’s petition to compel arbitration pursuant an electronically signed arbitration agreement with an employee. Espejo v. S. Cal. Permanente Med. Grp., No. BC562377 (Cal. App. Apr. 22, 2016). In the proceedings below, the employer offered declarations describing its electronic contracting procedures with employees. The procedures described in one of those declarations included an email sent to the plaintiff at the email address he provided, which included a hyperlink to a landing page where he could access his employment agreements for review and execution. After clicking on the link, the employee then had to a log in using unique credentials securely provided to the plaintiff by the employer. Once logged in, the plaintiff was presented various employment agreements (including the agreement containing the arbitration clause) and had to manually type in his name to sign the agreements. Upon signing the agreement, the employer’s system finalized the document by imprinting the date, time, and the IP address from which the plaintiff electronically signed the agreements. The employer’s declarant further stated that the plaintiff’s name could have only been typed into the signature pages of the agreements by someone using the plaintiff’s unique user name and password. In opposition to this evidence, the plaintiff only stated that he did not recall executing the agreement containing the arbitration clause and denied that the employer had met its burden to attribute the signature to him under the state UETA. Due to a procedural issue, the declaration described above was excluded from evidence, and the trial court denied the motion to compel arbitration. On appeal, the appellate court concluded that the trial court erred in excluding the declaration. The court then went on to hold that the employer had properly authenticated the signature on the employment agreements as the plaintiff’s signature, citing the standards for attributing signatures under the state UETA (which may include a demonstration of the efficacy of a security procedure applied to determine the person to which the electronic signature is attributable). The court relied upon the statements in the declaration detailing the security procedures applied by the employer, which showed that only someone using the unique credentials of the plaintiff could have entered his name on the signature line of the agreements, as well as the date, time and IP address stamps associated with the executed agreements. The appellate court contrasted its holding here with another California state court decision, Ruiz v. Moss Bros. Auto Group, Inc. 232 Cal. App. 4th 836 (Cal. App. Dec. 23, 2014), in which the party moving to compel arbitration failed to adequately demonstrate that the electronic signature belonged to the employee. In Ruiz, the employer’s declaration in support of its motion to compel arbitration only stated that the arbitration agreement was “presented to all [] employees” and “each employee is required to log into the company’s HR system, using his or her ‘unique login ID and password,’ to review and sign the employee acknowledgment form.” The court noted the contrast between the conclusory statements offered in Ruiz with the step-by-step declaration offered in this case, which described in detail how the agreement was given to the plaintiff, how he accessed it with his unique credentials, and how only someone using those credentials could have entered the plaintiff’s name into the agreement.