Federal Arbitration Act Did Not Apply Here.
Applying a “sliding scale” analysis, the Court of Appeal found that a “moderate level” of procedural and substantive unconscionability required affirming the trial judge’s order denying defendant employer’s motion to compel arbitration. Carbajal v. CWPSC, Inc., G050438 (4/3 Feb. 26, 2016) (Aronson, Bedsworth, Ikola).
The procedural unconscionability factors included an adhesion contract, failure to identify which of the AAA’s many different rules would apply, failure to provide the employee with a copy of the rules, and requiring the employee to sign the agreement without telling her where she could find the rules.
The one-sidedness of the arbitration provision resulting in substantive unconscionability included allowing the employer, but not the employee, to seek injunctive relief in court, waiver of the need to post a bond to obtain injunctive relief, and waiving the employee’s statutory right to recover attorney fees if she prevailed on Labor Code claims.
Because the employer failed to carry the burden of establishing that the FAA applied to the contract, the Court did not need to consider whether the result would have changed if the FAA had applied. “Carbajal’s intrastate use of a telephone to speak with some customers is at most a trivial connection to interstate commerce, especially where there is no other relationship between the Agreement and interstate commerce.”
Practice Tip: “When a trial court denies a motion to compel arbitration, a party may request the court to provide a statement of decision explaining the factual and legal basis for its decision.” Because the employer did not request a statement of decision, a) it waived any objection to the trial court’s failure to make necessary findings; b) the appellate court applies the “doctrine of implied findings and presumes the trial court made all necessary findings supported by substantial evidence.”
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