Employers are reminded that the procedure by which they enter into arbitration agreements with their employees is as important as the agreement’s language. A provision in an employment application requiring the applicant, but not the employer, to submit all disputes to arbitration was both procedurally and substantively unconscionable, and therefore unenforceable, the California Court of Appeal, Third Appellate District, has ruled. Wisdom v. AccentCare, Inc., No. C065744 (Cal. Ct. App. Jan. 3, 2012).
The agreement was procedurally unconscionable, the Court said, because the trial court found the plaintiff-applicants had no opportunity to negotiate its terms, the applicable arbitration rules were not provided, and the employer did not explain the agreement’s meaning. The agreement also was substantively unconscionable because, unlike the applicant, the employer was not bound to submit claims to arbitration. Consequently, the appellate court affirmed the order denying arbitration. For extensive analysis of this decision, please click on the following article: Arbitration Agreement in Employment Application Unconscionable, Unenforceable, California Court Rules