Arbitration, Employment, Enforceability, Unconscionability: Court of Appeal Rejects Employee’s Contentions She Never Entered Into Binding Arbitration Agreement

Also Rejected:  Contentions The Agreement Was Unconscionable.

     The Court of Appeal affirmed the judgment against an employee, including rulings that her claims were subject to arbitration, in Serafin v. Balco Properties Ltd., LLC, Case No. A141358 (1/4 March 16, 2015) (Ruvolo, Reardon, Rivera). 

     COMMENT:  The Court’s analysis of appellant’s arguments gives a pretty good roadmap for signposts leading to an enforceable agreement.  We list some of these:  (1) employee’s signature; (2) stand-alone arbitration agreement, short, and clearly written; (3) heading:  MANDATORY ARBITRATION POLICY in capitalized letters; (4) employee’s acknowledgment she understands arbitration policy and will comply with it; (5) context – the agreement here was presented by a human resources employee who explained contents; (6) attachment of the arbitration rules – or at least explanation as to how rules can be readily obtained; (7) mutuality of substantive provisions, so agreement is not one-sided in favor of employer; (8) severability provision to deal with unenforceable provisions (here, trial court apparently did sever a provision that violated FEHA, even without a severance clause, because the violation didn’t permeate the entire agreement); (9) broad language that any and all claims arising out of or in any way connected with employment must be submitted to binding arbitration; (10) do not require parties to bear own attorney fees and costs, a provision running counter to FEHA, which allows successful plaintiff to recover attorney’s fees and costs; (11) allow for reasonable discovery.