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(A version of this article appears in the California
Construction Law Reporter, published by the West Group.)
By James E. Acret
Employee
filed suit against employer alleging harassment and demotion
after she announced her pregnancy. She alleged that she
had been required to sign an employment contract that contained
an arbitration clause without being given a copy of it or
an opportunity to read it. The agreement contained a broad
arbitration clause that referred to the rules of JAMS/Endispute
and provided that if either party pursued any other legal
or administrative action, the responding party would be
entitled to recover its costs, expenses and attorney fees.
The trial court refused to enforce the arbitration agreement
after finding it was both procedurally and substantively
unconscionable.
Reversed
in Shubin v. William-Lyon Homes, Inc., ___ Cal.App.4th
___, ___ Cal.Rptr.2d ___, 2000 Daily Journal D.A.R. 12147
(2000).
First,
substantial evidence supports the claim of procedural unconscionability.
Second,
although the JAMS/Endispute rules provide only one deposition
for each party, the agreement must be interpreted so as
to give adequate discovery rights to the employee.
Third,
although the JAMS/Endispute rules require that arbitration
expenses be split, the agreement must be interpreted to
require the employer to pay all types of costs that are
unique to arbitration. The court interpreted the arbitration
agreement to provide that the employer must bear the arbitration
forum costs.
Fourth,
the agreement puts all the costs of any outside legal proceedings
on the responding party whether that party wins or loses.
This is unconscionable because it would place excessive
costs on the employee in some circumstances. Therefore,
that portion of the agreement is deleted.
The
order denying the motion to compel arbitration is reversed,
and the trial court is ordered to sever the offending provision
and to enforce the remaining portions of the agreement as
interpreted by the court.
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