U.S. District Judge Jacqueline Scott Corley held in abeyance CCFI Companies LLC’s motion to compel arbitration in Mahogany Lovette’s case, ruling that genuine factual disputes exist regarding the formation of a 2021 Employee Agreement. The court also denied Lovette’s request for Rule 11 sanctions against the defendant.
Lovette, who sued for California Labor Code violations and unfair business practices arising from her 2021-2022 employment, challenged the validity of an Employee Agreement bearing her initials and a checked box stating that clicking the box was equivalent to a handwritten signature.
CCFI argued that Lovette signed the agreement through a web-based onboarding platform called RedCarpet Onboarding, which required employees to scroll through documents and enter their Social Security Number before signing.
The company submitted a declaration from Edgar Bran, CIC’s Regional Manager, who stated that Lovette’s personnel records showed she clicked her assent to the Employment Agreement on August 24, 2021, at 5:04 p.m., and that her supervisor, Donna Espinoza, witnessed the signature later that day.
Lovette declared that she never met with Espinoza to review or electronically sign documents on any platform, noting that her interactions with the supervisor were limited to telephone conversations and brief in-person meetings.
Corley found that CCFI failed to prove there was no genuine issue as to whether Lovette actually performed the act of signing, particularly because the company provided no evidence that Lovette’s Social Security Number was kept private or secure from other employees.
The judge noted that under California law, an electronic signature has the same legal effect as a handwritten one, but the party seeking to compel arbitration must authenticate the signature by a preponderance of the evidence when its validity is challenged.
CCFI’s evidence that Lovette had to enter her Social Security Number to sign was insufficient because the company did not show that the number was unique to her or that it was protected from access by others.
The court also pointed out that CCFI presented no evidence that Espinoza herself checked the box or witnessed the signature, especially since Espinoza was no longer with the company.
Because a reasonable trier of fact could find that the initials and checked box were not Lovette’s act, Corley held that the motion to compel arbitration must be held in abeyance pending a trial on the formation of the agreement.
The judge also denied Lovette’s request for Rule 11 sanctions against CCFI, ruling that her opposition brief did not comply with the requirement to file a separate motion for sanctions or to strictly comply with the safe harbor provision.
Lovette is now represented by counsel who will need to prepare for a trial on arbitrability, with the parties directed to meet and confer by May 22, 2026, regarding discovery and a trial schedule.