Plenty of Hurdles to Enforcement in This Particular Case
In Wisdom v. AccentCare, Inc., No. C065744 (3rd Dist. January 3, 2012) (certified for publication), the Court of Appeal held:
“that a clause in an application for employment with AccentCare, Inc. (AccentCare), requiring only the applicant agree that, if hired, all disputes that cannot be resolved informally will be submitted to binding arbitration is both procedurally and substantively unenforceable as unconscionable.”
The leading case of Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000) proved to be legally dispositive for finding procedural and substantive unconscionability.
First, the Court of Appeal relied on Armendariz, supra, at 115, to affirm the finding of procedural unconscionability, i.e., that the provision was oppressive due to the unequal bargaining power of the parties: "[F]ew employees are in a position to refuse a job because of an arbitration requirement."
Second, the Court relied on Armendariz, supra, at 118, to affirm the finding of substantive unconscionability, because the provision only required the employee to arbitrate: "[I]n the context of an arbitration agreement imposed by the employer on the employee, such a one-sided term is unconscionable."
The Court took issue with another decision that did not find procedural or substantive unconscionability in “a nearly identical arbitration agreement.” Roman v. Superior Court, 172 Cal.App.4th 1462 (2009), pretty much guaranteeing that such arbitration agreements will remain ripe for controversy.
Query: Can a pre-employment arbitration agreement in a job application be drafted so as to avoid unconscionability? The following may help: A provision that is conspicuously placed, preferably in bold, larger type, initialed, and expressly pointed out to the prospective employee – much like a disclaimer in a consumer purchase. The prospective employee would acknowledge reading and understanding the provision – in Wisdom, the employees claimed not to know the meaning of “binding arbitration”. The provision would not be “take it or leave it.” And the mutuality would be express: e.g., both employer and employee would need to agree to arbitration, and both employer and both would have to agree and acknowledge that they are giving up their right to a trial by jury. If an arbitration forum (such as JAMS, AAA, ADR Services, JudicateWest) is referenced, the forum’s rules would also be attached. Some employers might even be willing to pay the arbitrator’s fees, removing another potential issue. Overkill?
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