Court Opinion

ID: 3189244
Source: CourtListenerOpinion
Date Created: 2016-03-28 20:00:58.779215+00
Date Added: 2024-06-11T12:24:07.091317
License: Public Domain

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                           NOT FOR PUBLICATION                              MAR 28 2016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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