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Arbitration agreement
unconscionable.
Offending
provisions not severable.
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Ramirez v. Charter
Communications (California Ct App 02/18/2022)
http://case.lawmemo.com/ca/ramirez.pdf
Sent to Custom
Alerts™ subscribers on 02/18/2022
After Angelica Ramirez
was fired, she sued claiming violation of the Fair Employment and
Housing Act (FEHA).
The parties had an arbitration agreement but the
trial court denied a motion to compel arbitration on the ground of
unconscionability, and the California Court of Appeal affirmed.
In order for a court to find an agreement to be
unconscionable there must be both procedural unconscionability and
substantive unconscionability.
Procedural
Unconscionability
Procedural unconscionability has
to do with the manner in which the agreement was formed (as
opposed to the content of the agreement).
This agreement was procedurally unconscionable.
It was undisputed that the arbitration agreement was an adhesion
contract because it was a mandatory condition of employment. The
court said this established "a minimal degree of procedural
unconscionability."
Substantive Unconscionability
Substantive unconscionability has to do with the content of
the agreement (as opposed to the manner in which the agreement was
formed).
This agreement was substantively unconscionable
for several reasons.
1. It cut the period that would
otherwise apply to file a FEHA action in court by as much as two
years.
2. One provision granted an award of attorney fees
for a prevailing party in moving to compel arbitration. This
violated the FEHA which allows attorney fees only if the action
was frivolous, unreasonable, or groundless.
3.
There was a lack of mutuality. The agreement is "unfairly
one-sided because it compels arbitration of the claims more likely
to be brought by an employee, the weaker party, but exempts from
arbitration the types of claims that are more likely to be brought
by an employer, the stronger party."
4. The limits on
discovery were unreasonable.
Severability
Sometimes a court will carve out the parts of an agreement
that are unconscionable and enforce what's remaining. However, the
court held that the offending provisions could not be severed due
to "the multiple defects we have found that work to Ramirez's
distinct disadvantage."
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