De Leon v. Pinnacle Property Management Services, LLC, G059801 (4/3 ord. to publish 12/8/21) (Marks, Fybel, Goethals).
This case applies established principles to affirm the trial court's order denying employer's motion to compel arbitration. The trial court found the arbitration agreement procedurally and substantively unconscionable. Procedurally unconscionable, because it was a take-it-or leave it precondition to employment, making it a contract of adhesion. Substantively unconscionable because it included a one year statute of limitation, and discovery limitations. Because there were two substantive flaws, the agreement was "permeated" with unconscionability, and therefore severability was not proper.
COMMENTS. The case is of interest, because statutes of limitation and limits on discovery do not necessarily make an arbitration agreement substantively unconscionable. Therefore, the case distinguishes other cases that address limitations on discovery and statutes of limitation. Shortened statutes of limitation that limit the ability of an employee to assert statutory rights can be a problem. As to discovery limitations, the court notes that limitations that appear neutral on their face may actually benefit an employer who has within its possession the information necessary to defend itself. The California Labor Commission requested that the opinion be certified for publication.
Also, we note that the contract was entered into in 2016. But if it had been entered into after January 1, 2020, the fact that arbitration was made a condition of employment would have raised an issue under AB 51. See our discussion of Chamber of Commerce v. Bonta.
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