CALIFORNIA APPELLATE COURT REFUSES TO ENFORCE “UNCONSCIONABLE” ARBITRATION CLAUSE WHICH WAS NEVER AGREED TO
Perry Sparks sued his former employer for wrongful termination in California state court. The defendant employer moved to compel arbitration, relying on an arbitration clause in its 2006 employee handbook. The trial court held, and the appellate court affirmed, that the motion to compel should be denied for several reasons: (1) the arbitration clause was included within a lengthy employee handbook and there was no specific acknowledgement or agreement by plaintiff to be bound by the clause; (2) the handbook did not constitute a contract, and any “agreement” found therein was rendered illusory by the defendant’s unilateral authority to alter the terms; (3) the specific rules referred to in the arbitration clause were not provided to plaintiff; and (4) the arbitration clause was unconscionable. The court side-stepped the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion by basing its holding alternatively on the non-existence of an agreement, which it held remains a gatekeeper inquiry properly addressed by the Court. Sparks v. Vista Del Mar Child and Family Services, B234988 (Cal. App. Ct. July 30, 2012).
This post written by John Pitblado.
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