Mendoza v. Trans Valley Transport, H044372

Background

Mendoza, a Spanish‑speaking truck driver who cannot read English, was hired by FTU/Trans Valley and signed English‑only receipt/acknowledgement forms and checklists but did not sign a separate arbitration agreement.
FTU distributed a 63‑page Employee Handbook with a two‑plus page “Binding Arbitration Policy” near the front; the handbook disclaimed being a contract, said policies (except at‑will status) could be changed unilaterally, and contained no employee signature line.
The Arbitration Policy described arbitration as a “condition of employment,” prohibited class actions, contained procedural terms and a broad delegation clause purporting to commit arbitrability and formation questions to the arbitrator.
Mendoza sued in state court on wage‑and‑hour and related claims; Employers moved to compel arbitration relying on the handbook and the acknowledgement/checklist forms.
The trial court denied the motion, finding (among other things) the handbook described itself as informational/noncontractual and evidentiary/authentication defects in Employers’ submissions. Employers appealed.
The Court of Appeal held Employers forfeited/waived their delegation‑clause argument by burying it in reply and fully litigating formation below, and on the merits concluded courts (not arbitrators) decide whether an arbitration agreement was formed; it affirmed denial because no express or implied agreement to arbitrate existed under the circumstances.

Issues

Issue	Plaintiff's Argument (Mendoza)	Defendant's Argument (Employers)	Held
1) Who decides arbitrability (delegation clause)?	Trial court should decide formation; delegation clause not preserved/waived.	Delegation clause gives arbitrator exclusive authority to decide interpretation, applicability, enforceability, and formation.	Employers forfeited/waived delegation argument; on merits court finds formation question is for the court where party contests existence of any arbitration agreement.
2) Was there an express agreement to arbitrate from the Handbook + acknowledgements?	Handbook and signed forms are informational, disclaim being a contract, and acknowledgements do not mention arbitration — so no mutual assent.	Handbook states arbitration is a condition of employment; acknowledgements accepted handbook policies, so express agreement exists.	No express agreement: handbook disclaimed contractual effect, policies were changeable, and acknowledgement forms failed to call out or incorporate the arbitration clause.
3) Was there an implied‑in‑fact agreement by continuing employment?	Continued employment after receiving handbook does not constitute assent where handbook is informational and contains no clear deeming language.	Receiving the handbook and continuing to work implies acceptance of its arbitration policy (employer’s proposed unilateral contract).	No implied agreement: unlike cases that gave clear notice or deeming language, these documents did not clearly bind employees to arbitration by continued employment.
4) Does Mendoza’s signature while illiterate bind him to arbitration?	His signatures on English forms are not an informed manifestation of assent because he could not read and was not given translations or explanation of arbitration.	Signature/acknowledgement is an objective manifestation of assent; inability to read is his risk.	Signature alone insufficient here: forms did not reference arbitration; objective assent requires adequate notice of arbitration term.

Key Cases Cited

Rent‑A‑Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (delegation clauses are severable and, absent a specific challenge to the clause, can delegate arbitrability to the arbitrator)
Sandquist v. Lebo Automotive, Inc., 1 Cal.5th 233 (2016) (strong presumption that courts decide arbitrability absent clear and unmistakable delegation)
Najarro v. Superior Court, 70 Cal.App.5th 871 (2021) (even with broad delegation language, courts must decide whether any arbitration agreement was ever formed)
Ahlstrom v. DHI Mortgage Co., L.P., 21 F.4th 631 (9th Cir. 2021) (courts should decide contract‑formation challenges despite delegation clauses)
Harris v. Tap Worldwide LLC, 248 Cal.App.4th 373 (2016) (handbook and acknowledgement can create arbitration agreement where handbook prominently disclosed arbitration and acknowledgement expressly referenced the arbitration agreement)
Esparza v. Sand & Sea, Inc., 2 Cal.App.5th 781 (2016) (handbook disclaimers and acknowledgement language can preclude finding an express arbitration agreement)
Sparks v. Vista Del Mar Child & Family Services, 207 Cal.App.4th 1511 (2012) (no arbitration where handbook was informational and acknowledgement did not reference arbitration)
Romo v. Y‑3 Holdings, 87 Cal.App.4th 1153 (2001) (distinguishing separate signed arbitration agreements from generic handbook acknowledgements)
Mitri v. Arnel Management Co., 157 Cal.App.4th 1164 (2007) (employee signature on generic handbook acknowledgement did not prove assent to a separate arbitration agreement)
Pinnacle Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC, 55 Cal.4th 223 (2012) (petition to compel arbitration is governed by ordinary contract formation rules)