©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 135 unspecified form of alternative dispute resolution before demanding arbitration”); Pokorny v. Quixtar, Inc., 601 F.3d 987, 999 (9th Cir. 2010) (arbitration provision that required employees—but not the employer—to submit disputes to non-binding, “employer-controlled” prearbitration dispute resolution process was substantively unconscionable because the provision gave the employer an “unfair advantage” by providing a “free peek” at the employee’s case). 62 Baxter v. Genworth N. Am. Corp., 16 Cal. App. 5th 713, 730 (2017). In upholding a refusal to compel arbitration, the Court of Appeal also cited provisions in the arbitration agreement that (1) prohibited contacting other employees about a claim, (2) shortened limitations periods, and (3) effectively limited an employee’s right to seek administrative remedies before an arbitration is conducted. 63 Beco v. Fast Auto Loans, Inc., 86 Cal. App. 5th 292 (2022). The Court of Appeal recognized that while the plaintiff did not make any showing that he could not “vindicate his rights without a guarantee that he can conduct any discovery,” such a showing was unnecessary because the discovery provision ran afoul of Armendariz on its face. 64 Davis v. Kozak, 53 Cal. App. 5th 897 (2020). The agreement was also deemed substantively unconscionable for exempting from arbitration any disputes involving “obligations under the Employee Confidentiality Agreement[.]” This provision enabled judicial claims that the employer was most likely to bring, while obliging the employee to arbitrate claims against the employer for wrongfully using the employee’s inventions or intellectual property. 65 E.g., Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1175 (9th Cir. 2003) (one-year limitations period set forth in arbitration agreement is unconscionable, as it would bar suits on continuing violations); Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 894 (9th Cir. 2002) (same); Stirlen v. Supercuts, Inc., 51 Cal. App. 4th 1519, 1542 (1997) (criticizing one-year limitations period in arbitration agreement that would not permit tolling). 66 Soltani v. W. & S. Life Ins. Co., 258 F.3d 1038, 1043-47 (9th Cir. 2001) (upholding provision in job application creating post-termination limitations period of six months, but striking down 10-day deadline to give written notice of intent to sue). 67 Pellegrino v. Robert Half Int’l, Inc., 182 Cal. App. 4th 87, 107-110 (2010). The California Supreme Court granted review of this case, albeit on other grounds, so it has been officially depublished. See Martinez v. Master Protection Corp., 118 Cal. App. 4th 107 (2004) (holding it was unconscionable for employer-imposed arbitration agreement to shorten limitations period to six months from date of violation, as that are insufficient to protect employees’ right to vindicate statutory protections). 68 Pearson Dental Supplies, Inc. v. Sup. Court, 166 Cal. App. 4th 71 (2008), review granted, No. S167169 (Cal. Aug. 21, 2008) (raising these issues: (1) What standard of judicial review applies to an arbitrator’s decision on a FEHA claim? (2) Can a mandatory arbitration agreement restrict an employee from seeking administrative remedies for violations of the Act?). 69 Pearson Dental Supplies, Inc. v. Sup. Court, 48 Cal. 4th 665 (2010). Pearson declined to address whether a one-year limitations period in the arbitration agreement was unlawful and independently rendered the agreement invalid, because the issue was not presented in the petition for review. Id. at 682 n.5. 70 Baxter v. Genworth N. Am. Corp., 16 Cal. App. 5th 713, 731-32 (2017) (reasoning that “[r]educing the time to pursue a claim by as much as two-thirds does not provide sufficient time to vindicate an employee’s statutory rights under the FEHA”). 71 Id. at 732. 72 Civ. Proc. Code § 1281.12. 73 Armendariz, 24 Cal. 4th at 124. 74 Armendariz, 24 Cal. 4th at 93 (citations omitted). See Wherry v. Award, Inc., 192 Cal. App. 4th 1242, 1250 (2011). 75 Juarez v. Wash Depot Holdings, Inc., 24 Cal. App. 5th 1197, 2013 (2018). The Court of Appeal breezed past the point that the English version was to control by adopting a cynical, speculative rationale: “At best, the difference in the severability clauses in the Englishlanguage and Spanish-language versions of the handbook is negligent; at worse, it is deceptive. Under the circumstances, we construe the ambiguous language against the interest of the party that drafted it. … This rule applies with particular force in the case of a contract of adhesion. … Wash Depot may have left the meaning of severability deliberately obscure, intending to decide at a later date what meaning to assert.” Id. at 2013 (citations omitted) (internal quotation marks omitted). 76 Ali v. Daylight Transp., LLC, 59 Cal. App. 5th 462 (2020). 77 Lange v. Monster Energy Co., 46 Cal. App. 5th 436, 454 (2020) (“No authority supports the trial court’s conclusion that any more than a single unconscionable provision in an arbitration agreement precludes severance.”) (emphasis in original). See Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1273 (9th Cir. 2017) (presence of more than one substantively unconscionable term “is only one of the relevant factors” in the severability inquiry, where “the dispositive question is whether ‘the central purpose of the contract’ is so tainted with illegality that there is no lawful object of the contract to enforce”). 78 Lange v. Monster Energy Co., 46 Cal. App. 5th 436, 455 (2020). 79 Alberto v. Cambrian Homecare, 91 Cal. App. 5th 482 (2023). 80 Kec v. Superior Ct. (R.J. Reynolds Tobacco Co.), 51 Cal. App. 5th 972 (2020). 81 Conyer v. Hula Media Servs., LLC, 268 Cal. Rptr. 3d 346 (2020). The two offending provisions required the parties to pay pro rata shares of arbitral fees and costs, and required the arbitrator to award attorney fees to the prevailing party—provisions invalid under, respectively, Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal. 4th 83-84, 112 (2000) (employees can’t be compelled to pay more fees than what they would have to pay in court) and Serafin v. Balco Props. Ltd., 235 Cal. App. 4th 165, 183 (2015) (requiring each party to bear own attorney fees was unenforceable because it would deprive a FEHA plaintiff an unwaivable statutory remedy available if she prevailed: “[s]uch a modification of California law is inappropriate under Armendariz”). The Court of Appeal in Conyer explained why these provisions were severable: “Plaintiff has not shown that unconscionability so permeates the arbitration clause that the arbitrator’s fees and costs and the attorney fees provisions cannot be severed, leaving a fully mutual and enforceable arbitration agreement. This is not a case where we must reform the contract by augmenting it or otherwise rewriting the parties’ agreement, which of course we cannot do.” 53 Cal. App. 5th at 354. 82 Conyer v. Hula Media Servs., 268 Cal. Rptr. 3d 346 (2020), review granted, No. S264821 (Cal. Dec. 16, 2020).
RkJQdWJsaXNoZXIy OTkwMTQ4