Greist v. LendUS, LLC

Background

Barbara Greist and Susan Schell worked as Loan Assistants for LendUS. The opinion also identifies Melanie Green as a plaintiff. LendUS’s Human Resources manager and later Director of Human Resources, Katrina Merritt, declared that LendUS required employees to enter arbitration agreements as a condition of employment. She stated that LendUS used the same form agreement for all employees and required employees to acknowledge the agreement through the company’s workforce-management service.

The exemplar agreement stated that employment-related claims would be resolved through final and binding arbitration under the Federal Arbitration Act. It also stated that employees and LendUS would submit only individual claims and would not bring class or representative claims, subject to applicable law.

LendUS’s vendor maintained the employees’ signed policy documents. After LendUS dissolved, it ended its account with the vendor, which then deleted the policies and agreements. Despite a search, the vendor could not recover the plaintiffs’ acknowledgments, and LendUS could not produce the signed arbitration agreements.

Legal standard

The Federal Arbitration Act governs motions to compel arbitration. The court must determine whether a valid arbitration agreement exists and whether that agreement covers the dispute. To show that an agreement exists, the party seeking arbitration must demonstrate under the summary-judgment standard that there is no genuine dispute about any material fact concerning formation of the agreement. The party seeking arbitration bears the burden of proving a valid agreement under California contract law.

Court’s analysis

LendUS argued that its inability to produce the signed agreements was not fatal because the plaintiffs’ continued employment showed acceptance of the arbitration terms. The court disagreed. Merritt stated that employees were required to sign the same form agreement, but she did not state that the agreements were sent to the plaintiffs, returned with their signatures, or reviewed by her. She also did not identify records showing that the plaintiffs received or returned signed agreements.

The court concluded that these statements did not establish that the plaintiffs signed or received the agreements, or that they were told that continuing to work would constitute acceptance of LendUS’s arbitration policy. The court also found the 2018 acknowledgment email insufficient. The email was addressed to Monique Ono rather than the plaintiffs, and Merritt did not specifically state that the plaintiffs received it or completed the acknowledgment process. The email referred to the arbitration agreement and made participation in the acknowledgment process mandatory, but it did not tell the plaintiffs that arbitration was a condition of employment or that continuing to work would constitute acceptance regardless of whether they completed the process.

Disposition

The court held that LendUS had not carried its burden to show, as a matter of law, that an arbitration agreement existed. It DENIED LendUS’s motion to compel arbitration. Because that ruling resolved the arbitration motion, it DENIED AS MOOT LendUS’s motion to stay the case pending a ruling on the arbitration motion. The opinion states that an initial case-management conference remained scheduled for April 24, 2025. The supplied text’s judge signature is not clear enough to identify the judge’s full name reliably.