Clayborne v. SSA Group, LLC

Background

Tykia Clayborne brought an employment discrimination and retaliation case against SSA Group, LLC. She alleges that SSA employed her from January 1, 2023, to March 8, 2023, and that it wrongfully terminated her because she is a woman and because she complained about gender discrimination and workplace health and safety risks.

Clayborne filed the case in state court on December 12, 2024. The opinion states that she asserted six claims, including claims under California’s Fair Employment and Housing Act, a California workplace-complaint retaliation statute, and California public-policy law. SSA answered and removed the case to federal court based on diversity jurisdiction. SSA then moved to compel arbitration and stay the court action. Clayborne opposed the motion.

The alleged arbitration agreement

During onboarding, Clayborne created an account on SSA’s Dayforce learning-management system. The system gave her access to California and national employee handbooks. She electronically checked a box acknowledging the handbooks on January 2, 2023.

The handbooks contained an arbitration provision covering disputes arising from or connected with employment. But the handbooks also stated that they were not contracts and did not create any enforceable promise or guarantee concerning employment terms, conditions, or procedural rights. The acknowledgment stated that Clayborne understood and acknowledged the arbitration agreement, but it did not expressly state that she agreed to be bound by it. SSA did not provide a handbook signed by Clayborne.

Court’s analysis

Under the Federal Arbitration Act, a court may order arbitration when a valid arbitration agreement exists and covers the dispute. The court applied California contract law to determine whether the parties formed an agreement. Contract formation requires mutual assent, meaning that the parties’ words and actions objectively show agreement.

The court held that the handbook language was ambiguous. The arbitration provision suggested that the parties intended to arbitrate employment disputes, while the handbook’s repeated statements that it was not a contract or enforceable promise suggested the opposite. The court also found that merely requiring Clayborne to “understand and acknowledge” the arbitration agreement did not show that she agreed to be bound by it.

The court relied on a California appellate decision, Esparza v. Sand & Sea, Inc., involving similar handbook language. It distinguished another California decision, Harris v. TAP Worldwide, LLC, because the agreement in Harris expressly stated that arbitration was a condition of hiring and continued employment and that continued employment constituted consent. The court found no comparable language in SSA’s handbooks.

Ruling

The court found that SSA failed to establish the existence of an enforceable contract to arbitrate. It denied SSA’s motion to compel arbitration and stay the court action. The court did not reach the parties’ other arguments concerning unilateral modification or unconscionability because those issues were moot.