HR director who hid that she hadn’t signed her arbitration agreement still can’t be forced to arbitrate

A California appellate court ruled that an employee who misled her employer into thinking she had signed an arbitration agreement could still refuse to arbitrate because she never signed. In Gorlach v. The Sports Club Company, the employee, a former Human Resources director, was in charge of rolling out the company’s new mandatory arbitration agreements in 2010. Before then, the employer did not have any arbitration agreements with its employees. The employee repeatedly told her managers that the company’s entire management team (including herself) had signed the arbitration agreement. She also knew that agreeing to the new mandatory arbitration policy was a condition of ongoing employment with the Sports Club Company. But in fact, the employee had never signed her arbitration agreement and she opposed the mandatory arbitration policy so much that she quit her job rather than risk being bound by it (she subsequently sued in court for discrimination, harassment and various other claims). The court held that there was not enough evidence to show that the employee ever intended to be bound by the arbitration agreement. Even though the agreement was a condition of ongoing employment, the employee quit before signing it, thereby evincing her unwillingness to submit to the agreement. And while the employee had indeed misled her employer into thinking she had signed it, the employer suffered no damage from that misrepresentation. The employer was still rolling out its new arbitration agreement at the time the employee quit, and there was no indication what (if anything) the employer would have done to the employee if it knew she was refusing to sign the agreement.