Arbitration agreements with onerous terms are sometimes struck down under California contract law. But in some cases, courts will grant arbitration anyway.
Recent case: Paulina Kanbar alleged that her former employer discriminated against her and essentially committed fraud when it didn’t disclose that the 9th Circuit Court of Appeals had ruled unconscionable an arbitration agreement employees had signed.
But the court said Kanbar couldn’t insist on litigating her case in federal court because she had at one point actually requested arbitration. (Kanbar v. O’Melveny & Myers, No. C-11-0892, ND CA, 2011)
Final note: Employers that operate in several states and use arbitration agreements should make sure those agreements are valid in all jurisdictions. Consult an attorney with experience in each state to see if the agreement must be tailored to comply with each state’s laws.
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