Choice Of Law, Employment, Unconscionability: Concluding That Arbitration Agreement Was Not Unconscionable Under Alabama Law, Third District Reverses Trial Court's Order Denying Employer's Petition To Compel Former Employees To Arbitrate

Arbitration Agreement Included Alabama Choice Of Law Provision.

Alabama State Flag.

        When former employees, who were hired as temporary claim adjusters, sued the insurance company that had hired them in a class action complaint alleging various employment violations, the California trial court agreed that the arbitration agreement was unconscionable.  Analyzing the trial court's order under Alabama law, the Court of Appeal reversed and remanded, finding no unconscionability.  Quiroz et al. v. E.A. Renfroe & Company, Inc., C082316 (3rd Dist. 7/26/17) (Renner, Mauro, Hoch) (unpublished).

        The agreement had an Alabama choice of law provision.  While Alabama law, like California law, provides that the party objecting to arbitration must show both procedural and substantive unconscionability, it appears that Alabama case law may make it a little harder for an employee to establish unconscionability.  In any case, I wouldn't overthink this.  Perhaps by design, the opinion quarantines its ruling by referring twenty-one (21) times to Alabama law, and by leaving the case unpublished.

        COMMENT:  Alabama law includes a colorful definition of unconscionability.  "Under Alabama law, '[a]n unconscionable contract or contractual provision is defined as a contract or provision "such as no man in his sense and not under delusion would make on the one hand, and as no honest and fair man would accept on the other."'"