Procedural Posture

Plaintiff employee sued defendant employer for sex discrimination, harassment, and retaliation, and the Superior Court of Alameda County, California, denied the employer’s motion to compel arbitration. The employer appealed.

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Overview

The reviewing court held first that it was proper for the trial court, rather than an arbitrator, to determine whether a valid arbitration agreement existed because the provision giving the arbitrator exclusive authority to decide enforceability issues was unconscionable. The trial court also correctly found that the arbitration agreement as a whole was unenforceable because it was permeated with unconscionability. It was a contract of adhesion and thus was procedurally unconscionable. It also included at least three provisions that were substantively unconscionable, including the provision for arbitrator determination of enforceability issues, a provision requiring that the employee pay a portion of costs, and a provision severely limiting the discovery provided by Code Civ. Proc., § 1283.05. With regard to costs, it was irrelevant whether the employee’s required contribution was small or whether her court costs in the event of a trial would have been greater. With regard to discovery, the employee’s ability to prove her claims would have been unlawfully thwarted because the permitted amount of discovery was low while the burden for showing a need for more discovery was high.

Outcome

The court affirmed the trial court’s order denying the motion to compel arbitration.