Thursday, April 7, 2016

Court for Me, but Arb for You, Means Court for Everyone.

Carbajal v. CWSP, Inc., No G050438 (D4d3 Feb. 26, 2016)

The Court of Appeal here affirms a trial court’s denial of a motion to compel arbitration based on a finding that the arbitration provision was unconscionable. The clause was contained in an adhesive employment contract, which made it mildly procedurally unconscionable. That was made worse by the fact that it called for the use of “the rules of AAA,” without identifying which of the 100+ sets of AAA rules were to apply. Nor did it include or provide a means of accessing the applicable rules. 


But what really kills the deal is the one-sidedness of the substance. It let only the employer go to court to get injunctive relief, and specifically waived any bond requirement in doing so. And it waived the employee’s right to get statutory fees on her Labor Code claims. Balancing the procedural and substantive unconscionability, the trial court did not err in declining to enforce the provision. Nor did it abuse its discretion in declining to sever the problematic terms for the rest of the agreement. Given the number of substantively unconscionable terms, it was reasonable for the trial court to find the unconsionability to be too pervasive to merit severance.

Affirmed.

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