The California Supreme Court issued its opinion in Ramirez v. Charter Communications, affirming in part that the arbitration agreement contained some substantive unconscionability but remanding the case to determine whether the agreement could be salvaged by severing the unconscionable provisions. In doing so, the California Supreme Court clarified its view on the enforceability of several common arbitration provisions—including those limiting discovery in arbitration—and the standard courts should apply when deciding severability.

The Case

The plaintiff was hired by Charter Communications in July 2019 and signed an arbitration agreement as a condition of her employment. After her termination in May 2020, the plaintiff sued Charter Communications for discrimination, harassment, and retaliation under the Fair Employment and Housing Act (FEHA).

Both the trial court and the court of appeal found the arbitration agreement to be procedurally and substantively unconscionable and ruled that these unconscionable elements could not be severed from the agreement. With respect to substantive unconscionability, the lower courts identified four provisions that, in their view, were unconscionable:

• The lack of mutuality in the covered and excluded claims provisions.
• A shortened limitation period for filing claims.
• The limited number of depositions.
• The potential for the employer to recover attorney fees if it prevails on a motion to compel arbitration.

The California Supreme Court...

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