Takeaway: An arbitration agreement imposed as a condition of employment, written in a small font with paragraphs filled with statutory references and legal jargon and containing several unfair provisions, was not enforceable.
A trial court in California correctly found that an arbitration agreement was both procedurally and substantively unconscionable and did not err in refusing to enforce the agreement, a California appeals court recently ruled.
A contract is unfair or “unconscionable” if one of the parties lacked a meaningful choice in deciding whether to agree, and the contract contains terms that are unreasonably favorable to the other party, the appeals court said. The unconscionability doctrine has both a procedural and a substantive element, the court explained.
The employee worked in northern California as an insurance sales agent for a national association from March 4, 2019, to approximately mid-December 2020. In 2021, she sued the association for race discrimination, disability discrimination, retaliation, harassment and wrongful discharge.
The association sought to compel the employee to bring her claims in arbitration. The employee argued that the arbitration agreement was unconscionable and therefore unenforceable.
The association required all employees to agree to arbitrate all workplace claims as a condition of their employment. The arbitration agreement consisted of two letter-size pages, consisting of seven single-spaced paragraphs in a small font size....
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