California Court of Appeal Strikes Down USC Arbitration Agreement as Unconscionable

The Court of Appeal of the State of California Second Appellate District found an arbitration agreement between the University of Southern California (USC) and its employee (plaintiff) to be unconscionable. The employee filed a lawsuit against USC and two coworkers, alleging discrimination and harassment. USC sought to compel arbitration based on an agreement the employee signed as a condition of her employment. The trial court denied this motion, ruling that the agreement was unconscionable and could not be severed. USC appealed the decision, but the appellate court affirmed the trial court’s findings.

The case underscores the importance of having a skilled attorney when dealing with arbitration agreements. These agreements often contain complex and sometimes unfair terms that can heavily favor the employer. Without legal assistance, employees might unknowingly waive their rights to pursue specific claims in court, as seen in this case.

The Difference Between Procedural and Substantive Unconscionability

The Los Angeles County Superior Court’s decision to deny USC’s motion to compel arbitration highlights key aspects of procedural and substantive unconscionability under California law. Procedural unconscionability occurs when an agreement is presented as a contract of adhesion, meaning it is offered on a take-it-or-leave-it basis with no opportunity for negotiation. In the case involving USC, the arbitration agreement was forced upon the employee as a mandatory condition of employment, illustrating a classic example of procedural unconscionability.

Substantive unconscionability, on the other hand, focuses on the fairness of the agreement’s terms. The court found the arbitration agreement’s scope and duration to be excessively broad and unfair. The agreement required the employee to arbitrate all claims against USC and its related entities indefinitely, even if the claims had no relation to her employment. Additionally, the agreement lacked mutuality, compelling the employee to arbitrate her claims while not imposing the same requirement on USC’s related entities.

These findings are significant because they underscore the importance of balanced and fair arbitration agreements. In California, courts scrutinize these agreements to ensure they do not overly favor one party at the expense of another. This case serves as a reminder that employees should be aware of their rights and the potential for unconscionable terms in arbitration agreements.

The Role of an Employment Lawyer in Challenging Unfair Arbitration Agreements

The appellate court’s decision to uphold the trial court’s findings highlights the critical role an employment lawyer plays in these cases. An experienced attorney can identify unfair and one-sided terms within arbitration agreements and challenge their enforceability.

When faced with an arbitration agreement, employees must understand their rights and the potential implications of signing such agreements. Legal help is crucial in reviewing these documents and ensuring employees do not waive important legal protections. A knowledgeable employment lawyer can provide guidance and support, ensuring justice is served.

How Employment Lawyers Protect Your Rights Against Unfair Arbitration Agreements

Employment lawyers play a crucial role in protecting employees from unfair arbitration agreements. These agreements can often be complex and filled with legal jargon that obscures their true implications. An attorney can help employees understand their rights and the potential consequences of signing such agreements.

Having legal assistance is vital in these situations. An attorney can scrutinize the terms of an arbitration agreement and argue against its enforceability if it is found unconscionable. If you face an arbitration agreement as a condition of your employment, seek legal advice before signing. An employment lawyer can review the terms, explain your rights, and challenge unfair provisions. This proactive approach can help you avoid unwittingly giving up your legal protections and ensure that you receive fair treatment.

If you have questions about an employment arbitration agreement, reach out to the Normand Law Firm, APC at 800-700-WAGE or through our secure online contact form.


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