California Court of Appeals Rules that Arbitration Clause is Unconscionable and Unenforceable in Recent Employment Decision

Many corporations and other California employers with large numbers of employees like to use arbitration agreements with their employees to streamline the process of addressing employment law-related issues. At first glance, arbitration agreements offer both employees and employers a simplified process to address grievances between the parties. In practice, however, arbitration agreements function to put employees at a disadvantage when compared to other acceptable ways of addressing complaints and disputes. The California Court of Appeals recently addressed a claim by an employee that the arbitration process they agreed to was unfair and should not be enforced.

The plaintiff in the recently decided appeal had been an employee of the defendant, a large communications company. As a condition of her employment with the defendant, the plaintiff was required to enter into an arbitration agreement to resolve any disputes. The agreement included provisions that would make it more difficult for employees to succeed at making claims against the defendant. The plaintiff was terminated from employment with the defendant less than one year after starting the job, and she alleged that the termination was unlawful. The plaintiff made several claims in state court under the Fair Employment and Housing Act, alleging unlawful termination.

In response to the plaintiff’s lawsuit, the defendant attempted to enforce the arbitration agreement, remove the plaintiff’s claims from state court, and collect attorneys’ fees from her for filing the suit in the first place. The plaintiff responded that the arbitration clause was unconscionable and against public policy because employees were essentially forced to give up their legal rights to a fair process in order to work for the defendant. The California state court ultimately agreed with the plaintiff, finding that the defendant was violating public policy by forcing their employees to adhere to an unfair arbitration agreement. The defendant appealed the ruling to the state Court of Appeals, where the lower court’s ruling and reasoning was affirmed. Specifically, the court ruled that several provisions of the arbitration agreement were unconscionable and unenforceable, and as a result, the plaintiff’s claim shall proceed in the state court.

Where to Turn with Questions About Unlawful Termination or Arbitration Agreements

Policymakers and employers are engaged in an endless dance, with policy generally setting out to protect employees, and employers seeking a way around the protections. Employers have great incentives to prevent their employees and former employees from pursuing claims in state court, and unfortunately, they get away with it far too often. If you or a friend has been mistreated at work by an employer or is being forced into arbitration to address complaints or concerns, you don’t necessarily have to play the employer’s game. Consulting with a qualified California employment law attorney from the Nourmand Law Firm is the first step to having your claim heard in a fair manner. Our experienced employment law attorneys understand the tricks that employers use to prevent their employees from obtaining relief, and we can help you hold them accountable, whether in a courtroom or at arbitration. For a free, no-obligation consultation with a California employment law attorney, call 310-553-3600 today.