Filed 8/25/23 Theobald v. Santa Monica Seafood Co. CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION TWO

BRAD THEOBALD,

Plaintiff and Respondent,

v.

SANTA MONICA SEAFOOD 

COMPANY,

Defendant and Appellant.

 B324090

 (Los Angeles County

 Super. Ct. No. 

 22STCV17589)

APPEAL from an order of the Superior Court of 

Los Angeles County, Maureen Duffy-Lewis, Judge. Reversed 

with directions.

Allen Matkins Leck Gamble Mallory & Natsis, Grant P.

Alexander and Shauna E. Woods for Defendant and Appellant.

Cabanday Law Group and Orlando F. Cabanday for 

Plaintiff and Respondent.

_____________________________________________
2

Appellant Santa Monica Seafood Company (SMS) moved to 

compel arbitration of an employment lawsuit filed by respondent 

Brad Theobald. SMS cited a “Mutual Arbitration Agreement” the 

parties signed in 2009. The trial court denied SMS’s motion.

On de novo review, we conclude that SMS proved the 

existence of an enforceable arbitration agreement. Changes to 

SMS’s employee handbook in 2011 did not rescind the 2009 

arbitration agreement; instead, the handbook reinforced the duty 

to arbitrate. Theobald’s failure to sign a new arbitration 

agreement after 2011 did not alter his continuing, mandatory

duty to arbitrate. We reverse and remand with directions to 

order the parties to arbitrate their dispute.

FACTS AND PROCEDURAL HISTORY

Theobald Files His Lawsuit

Theobald worked for SMS for over a decade, as an at-will 

employee. He was promoted during his tenure but alleges that 

SMS let him know he would not become a senior manager 

because “he was an old white man and not an Italian.” SMS 

allegedly fired Theobald in retaliation for his complaints that it

mislabeled seafood sold to its customers, sexually harassed 

female employees, and committed insurance fraud.

Theobald complained to the Equal Employment 

Opportunity Commission, then filed suit against SMS. He 

asserts causes of action for discrimination; wrongful termination 

in violation of public policy; and retaliation for whistleblowing.

SMS Moves to Compel Arbitration

SMS moved to compel arbitration of Theobald’s complaint. 

It argued that he is bound by a Mutual Arbitration Agreement 
3

(Agreement) that the parties signed in 2009.1 He is also subject 

to a 2011 Employee Handbook (Handbook), which requires 

arbitration.

The Agreement requires arbitration of “any controversy, 

claim or dispute . . . relating to or arising out of your employment 

or the cessation of your employment.” Arbitration is the parties’ 

“exclusive remedy” and is binding, covering alleged violations of 

public policy, discrimination, wrongful termination, or any other 

employment-related claims, including ones falling under the Fair 

Employment and Housing Act (FEHA) or any other federal or 

state laws.

SMS terminated Theobald’s employment in 2022. After he 

filed a lawsuit, SMS demanded arbitration. Theobald refused to 

stipulate to arbitration, claiming SMS revised its arbitration 

agreement in 2011 and he did not sign the revision. SMS 

asserted that the Agreement was not invalidated merely because 

other employees signed a different arbitration agreement after 

2011.

SMS argued that the Federal Arbitration Act (FAA) 

controls because SMS engages in interstate commerce, with

facilities and employees in five states; it does business outside of 

California. The FAA requires arbitration unless there are 

grounds to revoke the Agreement. SMS agreed that state 

contract laws determine if an arbitration agreement is valid and 

enforceable.

1 Theobald agreed to arbitrate when he began working at 

SMS in 2008; after a hiatus, he restarted at SMS in 2009 and 

signed the Agreement.
4

Theobald Opposes the Motion to Compel

Theobald admitted signing the Agreement in 2009. He 

argued it is not binding because he “never agreed to the new 

arbitration agreement” in the 2011 Handbook. Theobald 

reasoned that the Handbook “cancelled the previous arbitration 

agreements.” (Emphasis omitted.) He did not sign a new 

arbitration agreement after 2011.

2

The Handbook’s “Mutual Arbitration of Disputes” clause 

reads, “any controversy, claim or dispute between you and the 

Company . . . relating to or arising out of your employment or the 

cessation of your employment with the Company will be 

submitted to final and binding arbitration as the exclusive 

remedy for such controversy, claim or dispute. . . . Possible 

2 The Handbook states that SMS “in its sole and absolute 

discretion, reserves the right to revise, supplement or rescind any 

of the provisions, policies, procedures, benefits and rules in this 

Employee Handbook, other than the policies regarding At Will 

Employment and Mutual Arbitration of Disputes. If changes are 

made, a new written policy will be issued and will prevail. All 

existing employees are required to execute an Employee 

Acknowledgement Form and Agreement to At Will Employment 

and Mutual Mandatory Arbitration of Disputes after receipt and 

review of this Employee Handbook. All new employees are 

required to execute this same Employee Acknowledgement Form 

prior to beginning work with the Company. No oral statements 

or representations can in any way change or alter the provisions 

of this Employee Handbook. The Employee Handbook is not an 

employment contract and is not intended to create a promise or 

representation of continued employment for any employee. This 

Employee Handbook supersedes all prior and/or written policies, 

procedures, rules, regulations, commitments and practices of the 

Company.”
5

disputes covered by the above include (but are not limited to) 

unpaid wages, breach of contract, torts, violation of public policy, 

discrimination, harassment, or any other employment-related 

claims.” The Handbook is available on-line; employees who want 

a printed copy can request one.

SMS’s Reply

SMS argued that Theobald signed the Agreement. The 

only grounds to rescind it are unconscionability, unjust contract, 

fraud or illegality. His failure to sign the Handbook’s forms did 

not cancel the Agreement. The Handbook, like the Agreement, 

requires arbitration.

The Court’s Ruling

The court denied SMS’s motion to arbitrate. Though 

Theobald signed the Agreement, he “never signed a new 

agreement. And therefore, there is no new contract.” The 

Handbook “canceled” the Agreement “and required existing 

employees, including the plaintiff, to sign a new 2011 arbitration 

agreement,” which “wasn’t done.” SMS appealed the order 

denying arbitration.

DISCUSSION

1. Appeal and Review

The denial of SMS’s motion to arbitrate is an appealable 

order. (Code Civ. Proc., § 1294, subd. (a).) “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 . . . . Where, as here, the 

evidence is not in conflict, we review the trial court's denial of 

arbitration de novo.” (Pinnacle Museum Tower Assn. v. Pinnacle 

Market Development (US), LLC (2012) 55 Cal.4th 223, 236
6

(Pinnacle).) We interpret the Agreement and the Handbook to 

determine if the parties must arbitrate.

2. General Principles

Public policy strongly favors contractual arbitration as an 

expedient means of dispute resolution; there is “ ‘a presumption 

in favor of arbitrability.’ ” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 

111, 125.) “Consequently, courts will ‘ “indulge every intendment 

to give effect to such proceedings.” ’ ” (Moncharsh v. Heily & 

Blase (1992) 3 Cal.4th 1, 9.) The policy favoring arbitration “does 

not extend to parties who have not agreed to arbitrate.” (Esparza 

v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787.)

The threshold question is the existence of an agreement to 

arbitrate. (Ahern v. Asset Management Consultants, Inc. (2022) 

74 Cal.App.5th 675, 687.) “ ‘[G]eneral principles of contract law 

determine whether the parties have entered a binding agreement 

to arbitrate.’ (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 

416, 420; [citation].) Generally, an arbitration agreement must 

be memorialized in writing. [Citation.] A party’s acceptance of 

an agreement to arbitrate may be express, as where a party signs 

the agreement. A signed agreement is not necessary, however, 

and a party’s acceptance may be implied in fact (e.g., Craig, at 

p. 420 [employee’s continued employment constitutes acceptance 

of an arbitration agreement proposed by the employer]) . . . . An 

arbitration clause within a contract may be binding on a party 

even if the party never actually read the clause.” (Pinnacle, 

supra, 55 Cal.4th at p. 236.)

3. The Parties Agreed to Arbitrate Disputes

If a court “determines that an agreement to arbitrate the 

controversy exists,” it “shall order” arbitration unless “[g]rounds 

exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2, 
7

subd. (b).) Similarly, under the FAA a provision to settle 

controversies by arbitration is “valid, irrevocable, and 

enforceable” absent legal or equitable grounds to revoke the 

agreement. (9 U.S.C. § 2.)

a. The Handbook Did Not Abrogate the Agreement

Theobald signed the Agreement in 2009, expressly 

consenting to arbitration. He does not claim the Agreement was 

invalid at inception, unconscionable, or too narrow to encompass 

his claims against SMS. Instead, he asserts that the Handbook 

“cancelled” the Agreement. We disagree.

By its terms, the Handbook “supersedes” prior “policies, 

procedures, rules, regulations, commitments and practices of the 

Company.” It does not supersede signed, mutual agreements or

support Theobald’s claim that it “expressly stated that all 

previous agreements between Appellant and Responded [sic] 

were superseded and a nullity.” The Agreement is not nullified 

by the Handbook.

Our reading is fortified by another clause in the same 

paragraph. It states that SMS “reserves the right to revise, 

supplement or rescind any of the provisions, policies, procedures, 

benefits and rules in this Employee Handbook, other than the 

policies regarding At Will Employment and Mutual Arbitration of 

Disputes.” (Italics added.) The Handbook thus forbids rescission 

of arbitration provisions.

Arbitration may be denied “when there are grounds for 

rescinding the agreement.” (Engalla v. Permanente Medical 

Group, Inc. (1997) 15 Cal.4th 951, 973.) A party may rescind if 

consent is obtained by mistake, duress, menace, fraud, or undue 

influence; or consideration for the contract fails or becomes void; 

or the contract is unlawful or prejudices the public interest. (Civ. 

Code, § 1689.) Neither party to the 2009 Agreement shows

grounds for rescission, nor did the trial court identify grounds to 
8

rescind. Because the Agreement is “mutual,” ostensibly 

benefiting both Theobald and SMS in a dispute, it cannot be 

unilaterally terminated by one signatory.

b. The Handbook Perpetuated Theobald’s Duty to 

Arbitrate

Theobald does not deny his familiarity with the Handbook. 

On the contrary, he concedes that his employment was “subject to 

(and his continuing employment conditioned on) the terms of the 

[2011] employment manual.” Instead, he declares, “I did not sign 

the 2011 arbitration agreement and did not agree to [it].” 

Though he failed to sign anything, Theobald impliedly accepted 

arbitration by continuing to work at SMS.

“[A]n agreement to arbitrate may be express or implied so 

long as it is written.” (Harris v. TAP Worldwide, LLC (2016) 248 

Cal.App.4th 373, 383 (Harris).) Anyone who accepts employment 

under the terms of an employee handbook assents to those terms. 

(Id. at pp. 383–384.) An arbitration clause in a handbook is not 

illusory simply because the employer may modify the handbook. 

(Id. at p. 385.) When an employee is at-will, as Theobald was, an 

employer may “unilaterally alter the terms of employment, 

provided that the alteration does not violate a statute or breach 

an implied or express contractual agreement.” (Schachter v. 

Citigroup, Inc. (2009) 47 Cal.4th 610, 620.) The parties had an 

express contract to arbitrate disputes. The Handbook does not 

violate the Agreement because it continues to require arbitration.

“ ‘[E]mployers must have a mechanism which allows them 

to alter the employee handbook to meet the changing needs of 

both business and employees.’ ” (Asmus v. Pacific Bell (2000) 23 

Cal.4th 1, 12.) When an employer adopts new policies, an 

employee’s continued employment under the new policies 

constitutes acceptance of the modification. (Id. at p. 15.) “[T]he 

availability of continuing employment serv[es] as adequate 
9

consideration from the employer.” (Ibid.) Thus, an arbitration 

agreement is enforceable if the employer exercises its right to 

modify its policies because the employer remains bound by the 

implied covenant of good faith and fair dealing. (Serafin v. Balco 

Properties, Ltd., LLC (2015) 235 Cal.App.4th 165, 176; Harris, 

supra, 248 Cal.App.4th at pp. 389–390.)

SMS has required arbitration of disputes since Theobald 

started employment in 2008. He executed the Agreement to 

arbitrate in 2009. Likewise, the Handbook requires arbitration of 

disputes. Theobald worked for SMS for 14 years, all the while

subject to arbitration under the Agreement and the Handbook. 

His assent to arbitration was express (under the Agreement) and 

implied when he continued to work at SMS for over a decade after 

the Handbook was modified.

Contrary to Theobald’s belief, the Handbook’s arbitration 

clause is mandatory, not “voluntary.” It states that any 

controversy, claim, or dispute “will be submitted to final and 

binding arbitration . . . as the exclusive remedy.” Language that 

“unambiguously require[s] arbitration as the sole and exclusive 

remedy” unmistakably waives the right to a judicial forum. 

(Volpei v. County of Ventura (2013) 221 Cal.App.4th 391, 396.)

Theobald invokes the Handbook as grounds for avoiding 

the Agreement. He cannot claim the Handbook benefits him by

“cancelling” his Agreement while simultaneously claiming the 

mandatory arbitration provisions in the Handbook do not apply 

to him. He was supposed to execute documents after reviewing 

the Handbook. His failure to do so did not change the Agreement

or the Handbook’s arbitration clause. He continued to work for 

SMS and could consult the Handbook at any time to study the 

terms of his employment, regardless of whether he signed it. 

“[W]hat matters is whether there is agreement, not whether 

there is a signature; agreement can be found from conduct that 
10

ratifies or impliedly accepts the deal.” (Fuentes v. Empire Nissan, 

Inc. (2023) 90 Cal.App.5th 919, 933.)

DISPOSITION

The order denying arbitration is reversed. The case is 

remanded with directions to order the parties to arbitrate their 

dispute pursuant to their 2009 Mutual Arbitration Agreement. 

Respondent to bear all costs on appeal.

NOT TO BE PUBLISHED.

LUI, P. J.

We concur:

ASHMANN-GERST, J.

CHAVEZ, J.