Parties Settle Unconscionable Arbitration Agreement after Court of Appeal Affirms Order Denying Motion to Compel Arbitration – Los Angeles Wage & Hour Claims Attorneys Blumenthal, Nordrehaug & Bhowmik

by Norman B. Blumenthal on August 28, 2013

GavelThe parties in an employment lawsuit have settled after the California Court of Appeal affirmed an order denying the defendants’ motion to compel arbitration.  Wisdom v. AccentCare, Inc.

Plaintiffs worked as on-call staffing coordinators for the Defendant.  The Plaintiffs filed suit against the Defendant alleging that they were not paid for off-the-clock work.  Because the Plaintiffs had signed an acknowledgment form that compelled arbitration of all employment issues, the Defendant filed a motion to compel arbitration.  Specifically, the arbitration provision stated:

“I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by AccentCare,that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with AccentCare, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules then in effect of the American Arbitration Association.”

The trial court found the arbitration clause to be unconscionable and denied the Defendant’s motion.  The Court of Appeal affirmed, finding that “The contract, being one of adhesion, was oppressive. It was given to plaintiffs upon their application for employment. This situation leads to inherent unconscionability because of the unequal bargaining power of the parties and the nature of the relationship. There was no evidence that the plaintiffs in this case were highly sought-after skilled employees who individually negotiated the details of their employment relationship with AccentCare.”

The Court of Appeal also noted that the arbitration clause was unconscionable because it lacked mutuality, i.e., it required the plaintiffs to arbitrate their claims but did not require the defendant to do so.

Defendant appealed.  The California Supreme Court granted review, however the matter was settled before review.

If your employer classifies you as exempt when you primarily perform nonexempt tasks, call an experienced Los Angeles labor attorney today at Blumenthal, Nordrehaug & Bhowmik at (310) 981-3918.  Blumenthal, Nordrehaug & Bhowmik is a California employment law firm with offices located in San Diego, San Francisco and Los Angeles. The firm dedicates its practice to contingency fee employment law work for issues involving misclassification as a salaried worker exempt from overtime, failure to pay vacation wages, misclassification as an independent contractor, off-the-clock work, wrongful termination, discrimination and other California labor laws.

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