Oregon employers that require arbitration for employment-related disputes recently received some good news from the Oregon Supreme Court. In Gist v. ZoAn Management, Inc., the Court rejected the plaintiff’s argument that his arbitration agreement was unenforceable because it limited the arbitrator’s authority to award him relief. Instead, the Court ruled that the arbitration clause was fully enforceable.
The facts of the case are straightforward. ZoAn Management is a delivery service that hired Gist as a driver and classified him as an independent contractor rather than as an employee. Gist filed a putative class action lawsuit against ZoAn, claiming that he had been misclassified as an independent contractor and thus did not receive the wages he was entitled to under Oregon law as an employee. ZoAn filed a motion to compel arbitration pursuant to the Driver Services Agreement (“DSA”) that Gist signed at the outset of his engagement. The DSA contained a clause requiring that “any dispute, claim or controversy” arising from the DSA be resolved through mandatory arbitration. Gist argued that the DSA’s arbitration clause was “unconscionable,” a legal doctrine that allows a court to strike a contract provision if it deems the provision so fundamentally unfair that it should not be enforced. Specifically, Gist pointed to language stating that the arbitrator could not “alter, amend or modify” the terms of the DSA, which Gist argued would prevent the arbitrator from concluding...
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