Court removes ‘unconscionable’ parts of arbitration agreement — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Court removes ‘unconscionable’ parts of arbitration agreement

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Here’s some good news for employers that use arbitration agreements: A California appellate court has ruled that when only part of an arbitration agreement turns out to be invalid because it is “unconscionable,” the rest of the agreement remains intact if the invalid section can easily be removed.

Recent case: Amgen hired Darrel Dotson as a patent attorney. The company asked him to sign an arbitration agreement on a take-it-or-leave-it basis. He signed.

Several years later, Amgen fired Dotson and he sued.

Amgen demanded the case go to arbitration, but Dotson argued the agreement was invalid.

The court said that while some parts might be unconscionable, it could strip those parts out without affecting the rest. It sent the case back to arbitration. (Dotson v. Amgen, No. B212965, Court of Appeal of California, 2nd Appellate Division, 2010)

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