Employee agreed to arbitrate by clicking button: California court

Company's best practice prevents HR staff from acting on worker's behalf at benefits enrollment

Employee agreed to arbitrate by clicking button: California court

In a recent California case, an employee alleged that she did not agree to arbitrate because was unaware that clicking a “save” button as part of an online benefits enrollment process would amount to an arbitration agreement.

Francis Coppola Winery, LLC bought a winery and hired some of its employees, including the plaintiff. Coppola held an orientation to inform new hires about available employee benefit programs. During the orientation, employees signed up for benefits using Coppola’s laptops. They logged into the website, viewed their own basic information, chose the health care coverage that they wanted, and added dependents that they wished to cover.

One option was offered by Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and The Permanente Medical Group, Inc. (collectively Kaiser). The plaintiff enrolled herself and her 22-year-old daughter as Kaiser members as of April 2014.

Three members of Coppola’s human resources team were present and available to answer the employees’ questions about the online benefits enrollment process. The company’s best practice prevented HR staff from sitting at a computer and acting on an employee’s behalf.

In 2017, the plaintiff’s daughter sued Kaiser. She claimed negligence and fraud based on its alleged failure to timely diagnose and treat her aggressive cancer. In response, Kaiser filed a petition to compel arbitration.

Read more: Fast Auto Loans pressured employee to sign arbitration agreement, California court rules

The trial court ordered arbitration because it found that Kaiser proved that there was an agreement to arbitrate. The arbitrator did not find Kaiser liable for the daughter’s death in June 2018.

Her parents, who took over her lawsuit, challenged the arbitration award and the order compelling arbitration. The plaintiff made the following allegations:

  • She was unaware of ever signing an agreement waiving her rights to a jury trial and binding her to arbitration
  • She did not know that clicking the save button would amount to an agreement to arbitrate
  • Nobody explained the agreement to her
  • She could not read English well enough to understand
  • She did not know how to use the laptop and could not recall using it to enroll for benefits
  • She asked for help from an HR employee, who solely operated the computer and who clicked the button

Arbitration rightly compelled

In the case of Perez v. Kaiser Foundation Health Plan et al, the California Court of Appeal for the First District upheld the trial court’s decision and disagreed with the plaintiff’s arguments. Substantial evidence supported that the plaintiff clicked the save button and agreed to the arbitration clause, the appellate court ruled.

The appellate court noted that, during the hearing, Coppola’s director of people operations testified about the orientation and the online benefits enrollment system. The director made explained the process as follows:

  • The HR department gave employees a temporary password to access the system then required them to immediately choose an individual password to continue past the homepage
  • Because of the assignment of a private and unique password, a specific employee was the only one who could access an onboarding portal and sign an arbitration agreement
  • The last screen of the enrollment process for Kaiser coverage displayed the arbitration notice and required employees to click the save button to continue

While the director said that she did not know if anyone personally assisted the plaintiff in completing the forms, she was present in the room and observed no HR employees operating the computers or filling out forms on behalf of employees.

The director assumed that the plaintiff logged into the enrollment system because a screenshot of her benefits page showed the criteria for logging in, namely a date and time stamp with her name. The plaintiff must have clicked the save button since both she and her daughter were successfully enrolled as Kaiser members, the director also assumed.

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