Another Arbitration Agreement Bites the Dust due to a Combination of Unconscionable Provisions

March 14, 2012


I know I've said this before, but if employers so relish their precious right to force employees to arbitrate all their claims, why can't they get it right and draft a simple arbitration agreement so that it is enforceable? Mayers v. Volt Management Corp.,__ C.A.4th___ (Feb. 2, 2012) is another example of an employer getting it wrong. For reasons any reasonable employer could have predicted, the California Court of Appeals struck down Volt's mandatory arbitration agreement.

Here Volt started out by providing its arbitration agreement to Mr. Mayers on a take-it-or-leave-it basis. Second, Volt failed to shed light upon the arbitration rules it required Mr. Mayers to follow should any case wind up in arbitration. Instead, it simply told Mr. Mayers that any arbitration would be governed by "the applicable rules of the AAA [American Arbitration Association]". Volt neither provided a copy of these rules to Mayers, nor did it tell him how or where to obtain such a copy himself. The court characterized these errors are procedurally unconscionable.

To top it off, Volt's arbitration agreement mandated that the arbitrator may award costs and attorney's fees to the prevailing party. If Volt had a lawyer, Volt would have known that this was an absolute no-no. The Fair Employment & Housing Act (FEHA) prohibits a court from awarding fees to an employer (for claims governed under the act such as covered employment discrimination or retaliation claims) unless the claims were frivolous, unreasonable and without foundation. Here Volt changed this standard of the law to favor the employer.

This case is a yawner - except it highlights - again - how employers just can't seem to play by the rules in their attempt to force arbitration agreements down their employees' throats!

Jody LeWitter
March 14, 2012