Jasmin Vazquez started working for SaniSure through a staffing agency in July 2019. She was hired directly by the company as an at-will employee that November. Her employment was “for no definite period,” and either she or SaniSure could terminate the employment relationship at any time.

As part of her hiring, SaniSure provided Vazquez with onboarding documents, including agreements to “utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to [her] employment.” Subject to limited exceptions, she agreed that any claim she had against the company would “be submitted to and determined exclusively by binding arbitration.” She also agreed to bring any claim individually, waiving her right to pursue a class or collective action. Changes to these agreements, if any, could be made only in writing.

Vazquez terminated her employment with SaniSure when she resigned in May 2021. Four months later, she negotiated a new employment offer and returned to work for the company. During negotiations the parties did not discuss whether Vazquez would be required to sign arbitration agreements again or whether claims related to her employment would be subject to arbitration. Vazquez’s second stint of employment with SaniSure ended in July 2022.

In October, Vazquez filed a class action complaint alleging that SaniSure failed to provide accurate wage statements during her second stint of employment. She also alerted both SaniSure and the Labor and Workforce Development Agency (LWDA) of her intent to add a derivative action under the Labor Code Private Attorney Generals Act (PAGA) (Lab. Code, § 2698 et seq.).

SaniSure moved to compel arbitration. The trial court denied the motion. All the claims in Vazquez’s complaint arose out of her second stint of employment with SaniSure. But SaniSure failed to show that Vazquez agreed to arbitrate claims arising from that stint of employment.

The court of appeal affirmed in the published case of Vazquez v SaniSure, Inc., -B329219 (April 2024.)

SaniSure contends the trial court should have granted its motion to compel arbitration because it showed the existence of an arbitration agreement covering Vazquez’s second stint of employment. The court of appeal disagreed.

“Here, we cannot say that SaniSure’s evidence was so uncontradicted, so unimpeached, and of such a character that it left no room for a judicial determination that it was insufficient to support the existence of an arbitration agreement governing Vazquez’s second stint of employment. “An arbitration agreement is tied to the underlying contract containing it.” (Moritz v. Universal City Studios LLC (2020) 54 Cal.App.5th 238, 246 (Moritz).) Such an agreement can be revoked “upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.) At-will employment contracts can be revoked upon reasonable notice. (Consolidated Theatres, Inc. v. Theatrical Stage Employees Union (1968) 69 Cal.2d 713, 727, fn. 12.)”

“Vazquez signed arbitration agreements during her first stint of at-will employment with SaniSure. But she revoked these agreements by terminating her employment in May 2021. The causes of action in Vazquez’s lawsuit are based on events that allegedly occurred only during her second stint of employment with SaniSure.”

“Thus, for her claims to be subject to arbitration, SaniSure must show that the parties agreed that the agreements Vazquez signed during her first stint of employment would apply to her second. (See Code Civ. Proc., § 1280, subd. (i) [arbitration agreement can be extended by implied agreement]; see also Litton Financial Printing Div. v. NLRB (1991) 501 U.S. 190, 205- 206 (Litton) [cause of action that arises after contract terminates may be subject to arbitration if arbitration agreement survives termination of the remainder of the contract].)”

“SaniSure has not done so. Vazquez testified that she never agreed that the agreements she signed during her first stint of employment would govern her second. She also said that SaniSure never told her that getting rehired was contingent on agreeing to arbitration. And the documents she signed upon rehiring do not mention arbitration. SaniSure points to no evidence to the contrary. It has thus failed to carry its – ‘almost impossible’ – burden of showing that the trial court erred as a matter of law when it denied the motion to compel arbitration. (Gamboa, supra, 72 Cal.App.5th at p. 166.)”

Arbitration Agreement Does Not Extend to Re-Employment Case