The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge
This matter comes before the court on defendant California Bank & Trust's ("defendant") motion to compel arbitration of plaintiff Sujla Maharaj's ("plaintiff") complaint against it. Defendant further moves to dismiss the action on the ground that all of plaintiff's claims are subject to binding arbitration, and thus, nothing remains to be litigated in federal court.*fn1
Plaintiff opposes the motion, arguing (1) that she did not enter an arbitration agreement with defendant, or (2) even if she did enter such an agreement, it is unenforceable as procedurally and substantively unconscionable.
Because the court finds that there is no binding arbitration agreement between the parties, it does not reach plaintiff's alternative argument. Defendant's motion must be denied because plaintiff did not agree to arbitrate disputes arising from her employment with defendant.
Plaintiff was employed by defendant from January 16, 1990 through February 4, 2010, when defendant terminated plaintiff's employment. Plaintiff alleges defendant wrongfully terminated her employment while she was on a protected medical leave. By this action, plaintiff seeks to recover damages and attorneys' fees based on common law and statutory claims, including claims under the Americans with Disabilities Act, the Fair Employment and Housing Act, the Family and Medical Leave Act, and the California Family Rights Act. (Compl., filed Feb. 3, 2011.)
Defendant asserts that on May 31, 2007 plaintiff signed and approved an Employee Handbook (the "Handbook") containing an arbitration provision. The Handbook provided that all past, present or future claims and controversies arising out of plaintiff's employment are subject to binding arbitration pursuant to the code of procedures of the American Arbitration Association ("AAA"). (Milloy Decl., filed May 27, 2011 [Docket #14-1], Ex. B.) The Handbook described the nature of the arbitration proceedings, including: (1) that the proceedings are conducted in lieu of any litigation in the courts; (2) the proceedings are binding on both parties; (3) the arbitration award is subject to limited review by a court; and (4) the proceedings are governed by the AAA employment dispute resolution rules, which permit the parties to mutually select an experienced arbitrator, to retain counsel, to conduct discovery, and to seek the same remedies available in a court of law. (Id.)
Plaintiff does not dispute that the June 2007 Handbook, relied upon by defendant in support of the motion, contains the above arbitration provisions. However, plaintiff contends she did not agree to those provisions. First, plaintiff emphasizes that the Handbook became effective on June 1, 2007, after she signed, on May 31, 2007, a document entitled "Zions Bancorporation Statement of Compliance with the Employee Handbook and Code of Business Conduct and Ethics" ("Statement of Compliance"). (Id. at Ex. A.) Designated as "Page 1 of 2," in this document plaintiff agreed that:
I certify that I am presently in compliance with all policies of the Company, including those in the Handbook and Code, without exception. I understand that in limited cases employees may have been granted exceptions to policy prior to the distribution of the Handbook and Code. I have listed below any exceptions that I believe apply to me and understand that they are not recognized until I receive written approval from my Company Human Resources Director or designee below. In addition, I have an ongoing obligation to submit written disclosure of exceptions to policies of the Company to my Company Human Resources Director or higher authority for approval. (Id.) Plaintiff did not list any exceptions to company policy. (Id.)
"Page 2 of 2," also entitled "Zions Bancorporation Statement of Compliance with the Employee Handbook and Code of Business Conduct and Ethics," provided, among other things, that "by signing below" the employee "acknowledge[s] that [he or she] received a copy of . . . the Employee Handbook . . . and [has] read [it] and will comply with the policies and standards contained [therein], . . . [including] Section 4.4 of the Handbook, which contains the MANDATORY BINDING ARBITRATION POLICY AND AGREEMENT[.]" (emphasis in original.) This page further provided that the employee understands that "by accepting or continuing employment with the Company, [he or she] agree[s] to use binding arbitration to resolve certain legal claims or controversies with the Company, . . ., including federal Title VII and state civil rights claims, pursuant to the mandatory binding arbitration policy." (Id.)
Plaintiff maintains she never saw Page 2 of the Statement of Compliance, and points out that she did not sign that page. (Pl.'s Decl., filed July 8, 2011 [Docket #16], ¶ 13.) Instead, plaintiff signed only Page 1 of the Statement of Compliance, and that page did not reference an arbitration provision. (Id.) Plaintiff attests she was never advised that by signing Page 1 she was agreeing to binding arbitration of all disputes with defendant and forfeiting her rights to a judicial forum. (Id. at ¶s 8-12, 14.) Rather, plaintiff asserts that defendant's Customer Service Manager gave her the Handbook and instructed her to sign Page 1 of the Statement of Compliance, which contained a signature line, and to immediately return the document. (Id. at ¶ 8.) Plaintiff states that the Manager did not explain the document or any of the contents of the Handbook. (Id. at ¶ 9.) Plaintiff maintains that she did not have time to read the Handbook before signing and returning Page 1 of the Statement of Compliance. (Id. at ¶ 14.)
Employment contracts are governed by the Federal Arbitration Act ("FAA"). 9 U.S.C. § 1, et seq; Allied-Bruce Terminix Companies v. Dobson, 513 U.S. 265, 269 (1995). Questions concerning the interpretation and enforceability of arbitration agreements subject to the FAA are determined by federal standards. Moses H. Cone Memorial Hosp. v. Mercury Constr., 460 U.S. 1, 22-24 (1983); see Slaughter v. Stewart Enters., Inc., 2007 WL 2255221, at *2 (N.D. Cal. Aug. 3, 2007) ("Federal substantive law governs the question of arbitrability."). However, courts apply ordinary state law contract principles in deciding whether the parties agreed to arbitrate a particular dispute in the first place. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
In ruling on a motion to compel arbitration, the court's inquiry is limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). If the finding is affirmative on both counts, then the FAA requires the court to enforce the arbitration ...