California Appellate Court Invalidates Arbitration Agreement Based on Its One-Sidedness

Earlier this month, a California appellate court issued a written opinion in an employment discrimination case involving the validity of an arbitration clause. The case is relevant to California nursing home abuse victims who may have signed an arbitration agreement prior to their injury, and who believe that the defendant may assert arbitration as a defense.

What Is an Arbitration Clause?

An arbitration clause is a contractual term by which the parties agree to settle a dispute through binding arbitration rather than through the court system. In theory, arbitration can present benefits to both sides, including decreased cost of litigation and quicker resolution of claims. However, in effect, arbitration clauses are often written to favor the party that writes them.

Issues involving arbitration agreements commonly arise in some California personal injury cases. Cases alleging California nursing home abuse or neglect very frequently involve an arbitration agreement because nursing homes usually include these agreements in the pre-admission contract that must be signed before care is provided.

Not all arbitration agreements are valid, especially when the terms are so one-sided that they unfairly favor one party. The case mentioned above resulted in a court invalidating an arbitration clause in the employment context based on procedural and substantive unconscionability.

The Facts

The plaintiff worked at the defendant company. By all accounts, the plaintiff was a good employee and had received favorable reviews. However, when the company changed its evaluation forms to include fields indicating an employee’s age, gender, and race, the plaintiff protested.

Later, the plaintiff took two months of approved leave under the California Family Rights Act. However, when the plaintiff emailed the human resources department during her leave to confirm the date she would resume employment, the plaintiff was told her position was eliminated. The plaintiff claimed that her position was filled with a white male applicant.

The plaintiff filed a discrimination claim against the employer. The employer asserted the arbitration clause as a defense to the lawsuit, claiming that the plaintiff had agreed to submit any claims to arbitration when she signed her employment contract. The court then had to determine whether the arbitration clause was valid.

The Court Rejects the Arbitration Clause

In finding for the plaintiff, the court determined that the arbitration clause was both procedurally and substantively unfair. The court noted the following aspects of the arbitration agreement:

  • Limitations on contacting other employees who may have been witnesses to the discrimination;
  • Limitations on the discoverable material available to the plaintiff;
  • Requiring a claim be filed within one year, which is shorter than the applicable statute of limitations; and
  • Requiring the plaintiff comply with default timelines that may interfere with the preparation of her case.

Taking all of these factors into account, the court determined that the agreement was too one-sided in favor of the employer. Thus, the plaintiff will be permitted to pursue her claim through the court system.

Have You Been Injured?

If you or a loved one has recently been injured in a California nursing home incident, but you believe you may have signed an arbitration agreement, you may not be bound by the agreement. Courts are willing to invalidate unfair arbitration agreements. At Sharifi Firm, we represent Southern California victims in a wide range of matters. We are experienced in dealing with arbitration agreements, and we know what to demonstrate to prove that the agreement was unfair. Call 866-422-7222 to schedule a free consultation with an attorney today.

More Blog Posts:

Plaintiff’s Case Permitted to Proceed Against Private Company Responsible for Maintaining Traffic Lights, Southern California Injury Lawyer Blog, November 13, 2017

California Car Accident Plaintiff Misses Out on Opportunity to Cross-Examine Defense Medical Expert, Southern California Injury Lawyer Blog, October 19, 2017

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