NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

OPINION

BEDSWORTH, Acting P. J.

INTRODUCTION

Nhan Hoa Comprehensive Health Care Clinic, Inc., appeals from an order denying its petition to compel respondent Raymond Doan to arbitrate his employment-related claims. The trial court ruled that Nhan Hoa had failed to produce a valid arbitration agreement.

We affirm. The documents Nhan Hoa submitted to support its petition indicate that the agreement to arbitrate, part of Doan's hiring paperwork, was a stand-alone agreement requiring execution to be binding; the company presented no evidence that Doan had ever signed the agreement. Accordingly Nhan Hoa did not carry its initial burden of showing a valid agreement to arbitrate.

FACTS

Nhan Hoa provides health care services to residents of Garden Grove. The company hired Doan as CFO in early May 2016. His employment was terminated at the end of July 2016.

Doan sued Nhan Hoa in December 2016. He alleged he was fired for protesting and refusing to cooperate with age and race discrimination in hiring a human resources manager.1 He also alleged the company withheld compensation to which he was entitled or delayed paying compensation to retaliate for his stand against age and race discrimination. In two other causes of action, Doan alleged his employment was terminated because he knew Nhan Hoa's CEO was going to falsify a document required by the federal government as part of the clinic's participation in a United States Department of Health and Human Services program as a federally qualified health center, eligible for federal grant money.

Nhan Hoa petitioned to compel arbitration in May 2017. It submitted three documents to support the petition: an offer of employment dated April 20, 2016; an acknowledgement of at-will status and clinic policies, signed by Doan and dated May 2, 2016; and two pages from an employee handbook entitled "Mandatory Arbitration to Settle All Claims." The second page from the handbook contains lines for a date and a signature, both of which are blank.

The trial court denied the petition to compel arbitration on the ground that Nhan Hoa had not presented evidence of a valid agreement to arbitrate. The two pages from the employee handbook had a signature line, indicating that the agreement to arbitrate was a separate, stand-alone agreement that Doan had to sign to indicate his acceptance. Doan had not signed it, so the pages did not obligate him to arbitrate. None of the other documents evidenced an agreement to arbitrate.

DISCUSSION

Although California law favors arbitration as a method for resolving disputes, it does not favor forcing people to arbitrate if they have not agreed to do so. (Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 704.) A trial court presented with a petition to compel arbitration must therefore first determine whether the petitioning party has evidence of a valid agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972; see Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413 [petitioner bears burden of proving existence of agreement to arbitrate].)

Interpreting an arbitration agreement is a matter of law, subject to de novo review, when there are no conflicting facts. (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60 (Avery).) If the trial court resolved a factual question, we review the resolution for substantial evidence, drawing all reasonable inferences in favor of the judgment. (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 12 (Jones).) We apply California contract law to determine whether a valid agreement to arbitrate exists. (Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787 (Esparza).)

Nhan Hoa presented the trial court with three documents as evidence of a valid agreement to arbitrate: an offer of employment, two pages from an employee handbook headed "Mandatory Arbitration to Settle All Claims," and an acknowledgement of at-will status and clinic policies.

The offer of employment nowhere mentions arbitration. It sets forth Doan's base salary and hours of work and lists the benefits for which he was eligible. Doan indicated his acceptance of the offer "and the terms of the employment as set forth above" by signing at the end. The "terms of the employment" do not include arbitration.

The two handbook pages relating to arbitration end with lines for a date and an employee signature. Both lines are blank. The penultimate paragraph states, "This is the complete agreement between the parties on the subject of arbitration of the described Claims or Controversies and supersedes any prior or contemporaneous oral or written understandings or representations on the subject." The final paragraph stated, in all capital letters, "I acknowledge that I have carefully read this agreement, that I understand its terms and that, in the event of a dispute between me and my employer, binding arbitration shall replace any jury or other trial."

Romo v. Y-3 Holdings, Inc. (2001) 87 Cal.App.4th 1153 (Romo) deals with an identical situation. In Romo, the employee handbook contained a three-page section called "Mutual Agreement to Arbitrate" that included lines for a date and an employee signature, both of which were blank. (Id. at pp. 1155-1156.) The section included a paragraph describing the agreement as a "complete agreement" that is substantially similar to the "complete agreement" paragraph in the Nhan Hoa handbook. (Id. at p. 1159.) The section also contained an acknowledgement that the employee had read and understood "this agreement." (Id. at p. 1160.)

The court in Romo held that the arbitration portion of the handbook was intended to be a stand-alone arbitration agreement and the lack of an employee signature rendered the agreement unenforceable. In so doing, the court relied on the separate signature line, the "complete agreement" language, and the acknowledgement language, all of which indicated an agreement to arbitrate separate from the rest of the handbook, one that had to be signed to be effective. (Romo, supra, 87 Cal.App.4th at pp. 1159-1160.)

The Nhan Hoa handbook is no different. There are blank lines for a date and an employee signature, a "complete agreement" paragraph, and an acknowledgement paragraph. Like the agreement in Romo, the arbitration section in this handbook is an unsigned stand-alone agreement. (See Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 1170-1171 [language of handbook indicates intention to have employee sign separate arbitration agreement].)

The third document Nhan Hoa submitted to support its petition was the acknowledgement for the Nhan Hoa Employee Handbook. Unlike the arbitration pages, the acknowledgement page is signed and dated by Doan. Among the provisions are: "This handbook does not create any express or implied contractual obligation on the part of [Nhan Hoa];" and "In reviewing the [Nhan Hoa] handbook, I have read and understood its drug and alcohol-free workplace policy and the policy against harassment, including sexual harassment. I agree to abide by these and all other [Nhan Hoa] policies. I understand that any violations of a [Nhan Hoa] policy may result in serious disciplinary action, up to and including immediate termination."

Once again Romo supplies the analysis. The employer in Romo argued that, despite the lack of a signature at the end of the arbitration provision, the employee's signature on the handbook's acknowledgement section made the arbitration provision binding. (Romo, supra, 87 Cal.App.4th at p. 1158.)

The court disagreed: "[W]e conclude that the employee handbook contains two separate and severable agreements: (1) the agreement to arbitrate which is the subject of section VIII; and (2) an agreement to be bound by the `benefits,' `policies,' `rules' and `procedures' contained within the remaining sections of the employee handbook." (Romo, supra, 87 Cal.App.4th at p. 1159.) The court noted that the acknowledgment section did not mention arbitration, but referred instead to "policies" and "rules." (Ibid.)

The acknowledgement page in this case is similarly devoid of references to arbitration. In fact, it goes even further, repudiating categorically any contractual obligation on Nhan Hoa's part, including, presumably, any contractual obligation to arbitrate. (See Esparza, supra, 2 Cal.App.5th at p. 789 [introductory handbook language expressly negated contractual formation].) As was the case in Romo, there are two separate agreements here. Only one of them is signed. (See Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 805 [employee did not consent to unsigned arbitration agreement].)

Nhan Hoa argues that a signature on the arbitration pages was unnecessary, citing Craig v. Brown & Root (2000) 84 Cal.App.4th 416 (Craig). In Craig, an existing employee was found to have agreed to arbitrate by continuing to work after being informed that the employer was instituting mandatory arbitration for employee disputes. (Id. at pp. 418-419, 420 [acceptance implied-in-fact].)

But the facts in Craig differ significantly from those before us now. The employee in Craig had been working for the company for 12 years when the new policy was instituted. (Craig, supra, 84 Cal.App.4th at p. 418.) The arbitration agreement was, in effect, a modification of her existing employment agreement, which she accepted by continuing to work for four years after receiving brochures explaining the new condition of employment.

Unlike the employee in Craig, Doan was a new hire. Arbitration was potentially a feature of the employment relationship from the start. But the documents associated with commencing his employment indicated that Nhan Hoa had to secure Doan's signature on a stand-alone agreement to arbitrate before it could enforce any such agreement. As discussed above, Nhan Hoa never did so.

In addition, in Craig there was no separate arbitration agreement to sign, only brochures explaining the new system. In this case, there was an express agreement to arbitrate, with a signature line, in Doan's initial paperwork. It was not signed. (See Gorlach v. Sports Club Co. (2012) 209 Cal.App.4th 1497, 1511.)

In its reply brief, Nhan Hoa cites two federal district court cases that rely on Craig to find an enforceable agreement to arbitrate. Neither case assists Nhan Hoa.

In Kruzich v. Chevron Corp. (N.D. Cal., Dec. 1, 2011) 2011 U.S. Dist. LEXIS 138140 (Kruzich), it was the employee who petitioned to compel arbitration. (Id. at *7.) There was, therefore, no issue as to whether the employee had consented to arbitration by continuing to work.

The other federal case, Doubt v. NCR Corp. (N.D. Cal., Sept. 13, 2010) 2010 U.S. Dist. LEXIS 102484, is similar to Craig in that the plaintiff/employee of several years was presented with a new condition of employment — participation in a dispute resolution program that included arbitration. (Id. at *1-2.) The employees were expressly informed when the new program rolled out that they would not have to sign anything; instead, their acceptance would be demonstrated by continuing to work or by accepting employment-related benefits. (Id. at *3.) By contrast, as stated above, the exhibits Nhan Hoa submitted to support its petition showed that Doan's acceptance would be demonstrated by signing a written arbitration agreement.2

Nhan Hoa also argues that an arbitration agreement need not be signed to be enforceable. This is true. California law, which governs contract formation even for agreements subject to the Federal Arbitration Act (Avery, supra, 218 Cal.App.4th at pp. 59-60), permits implied-in-fact acceptance of contract terms. (Id. at pp. 63-64.)

An implied contract is an actual agreement between the parties, "the existence and terms of which are manifested by conduct." (Civ. Code, § 1621.) The difference between an express and an implied contract lies in the way assent is manifested in each case: the former in words, the latter in conduct. "[B]oth types are based upon the expressed or apparent intention of the parties." (Varni Bros. Corp. v. Wine World, Inc. (1995) 35 Cal.App.4th 880, 888.) "Although an implied in fact contract may be inferred from the `conduct, situation or mutual relation of the parties, the very heart of this kind of agreement is an intent to promise.' [Citation.]" (Friedman v. Friedman (1993) 20 Cal.App.4th 876, 887.)

California law mandates an objective standard for contract interpretation. (Global Packaging, Inc. v. Superior Court (2011) 196 Cal.App.4th 1623, 1634.) The objective standard also applies to ascertaining the parties' intent. (ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1267.) A party's subjective intent is not controlling. (Smissaert v. Chiodo (1958) 163 Cal.App.2d 827, 830.) The objective standard relies in the first instance on the contract language. (Civ. Code, § 1639.)

Nhan Hoa supported its petition to compel arbitration with the three documents mentioned above. Applying an objective standard, the trial court found that the parties intended the arbitration agreement to be a separate agreement that was binding only if the employee signed it. Otherwise it would be pointless to include date and signature lines and the "complete agreement" language. Nhan Hoa submitted no evidence of any other means, such as conduct, by which Doan could have indicated his intent to agree to arbitrate. He could not, for example, have indicated his acceptance by continuing to work after being informed of the introduction of an arbitration provision into his employment agreement; he was just beginning his employment with Nhan Hoa.

"`It is generally held that the existence of an implied contract is usually a question of fact for the trial court. Where evidence is conflicting, or where reasonable conflicting inferences may be drawn from evidence which is not in conflict, a question of fact is presented for decision of the trial court. . . . [¶] Further, on appeal we must draw all reasonable inferences in favor of the judgment.' [Citation.]" (Caron v. Andrew (1955) 133 Cal.App.2d 412, 416.)

In this case, the trial court held that the evidence did not establish an intent to be bound by an unsigned agreement. In other words, the trial court was not persuaded the evidence showed Doan's implied acceptance of an agreement to arbitrate notwithstanding the absence of his signature on the written agreement in the handbook. On appeal, we must uphold the trial court's decision when substantial evidence supports it, drawing all inferences in favor of the judgment. (Jones, supra, 195 Cal.App.4th at p. 12.) Here, there is such evidence. Nhan Hoa did not carry its burden to show a valid agreement to arbitrate.

DISPOSITION

The order denying the petition to compel arbitration is affirmed. Respondent is to recover his costs on appeal.

MOORE, J. and FYBEL, J., concurs.