What happens if you sign an agreement, later decide it’s unfair and you want to back out, and a judge says you can?

Well, you might want to temper your excitement. Judges sometimes make mistakes, as a recent appellate court ruling demonstrates (Alvarez v. Altamed Health Services).

In December of 2014, Erendira Cisneros Alvarez was hired by Altamed Health Services. Before she started work, the company sent her an offer letter stating the conditions of her employment. If she agreed, she was to sign and return the letter.

Included in the offer letter was a two-page arbitration agreement. It said that she and Altamed would “utilize binding arbitration as the sole and exclusive means to resolve all disputes” related to her employment.

Both parties, it said, “specifically waive and relinquish our right to bring a claim against the other in a court of law.”

That means, it said, that “by this binding arbitration provision, both I and the Company give up our right to trial by jury of any claim I or the Company may have against each other.”

Alvarez signed and returned the offer letter to the company to confirm her acceptance of the job, sending with it a signed copy of the arbitration agreement. She started work in January of 2015.

She later testified that she did not remember signing the arbitration agreement. However, the court said her signature on it “appears to be identical” to the one on the offer letter, and she did not claim it was a forgery.

Altamed terminated Alvarez two years later. The court records do not state the reason.

In April of 2019 Alvarez sued the company in Los Angeles Superior Court, alleging wrongful discharge, violations of California’s Fair Employment and Housing Act, defamation, and other claims.

The company asked the court to compel arbitration of the dispute.

The court denied the company’s request. It did not rule on whether the parties had agreed to arbitrate, but it did agree with a claim by Alvarez that she “never knowingly waived her right to a jury trial.”

The trial court said that “neither the offer letter nor the arbitration agreement contains the word ‘jury’ much less stating that the parties were waiving the constitutional right.”

Further, “there is nothing [in the agreement] to put an employee on notice that this is a waiver of the right to present a case to a jury,” the court said.

Altamed appealed.

The appellate justices said they were “surprised by the trial court’s inability to find the word ‘jury’ or the jury provision in the arbitration agreement,” since it was clearly stated in the second paragraph of the two-page agreement.

Alvarez acknowledged that the trial court was mistaken about the absence of a jury waiver provision. But she argued that the mistake occurred because the agreement was in a very small typeface and was “incredibly difficult to read.”

The appellate judges were not persuaded. They noted that the typeface and spacing of the arbitration agreement were the same as in the offer letter – and in fact happened to be the same as in the trial court’s own ruling.

The appellate court noted that both federal and California law “favor enforcement of valid arbitration agreements” because arbitration offers “a speedy and relatively inexpensive means of dispute resolution.”

Since the mistake by the trial court about the jury trial provision was the sole reason it invalidated the agreement, the appellate justices said, the lower court’s decision had to be reversed.

Their ruling ordered the parties to arbitrate their dispute. No costs were awarded.

Justice, which is said to be blind, rarely stumbles. When it does, don’t expect that the mistake will be uncorrected and you will benefit.

By Laurie Murphy