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Appeals court refuses arbitration bid, cites one-sided, coercive agreement

by on
in Employment Law,Human Resources

A California appellate court has invalidated an arbitration agreement on the grounds that it was unconscionable. The court said it was both one-sided and oppressive.

Recent case: Rosita was a dietary supervisor at an assisted living facility. At the time she was hired, she was told she had to sign for the employee handbook and agree to arbitrate any claims she might have against the company. She signed and acknowledged receiving the ­handbook.

Later she would say that she felt she had no choice but to sign or she would lose her job.

Rosita sued over a long list of alleged California Labor Code violations, including failure to pay overtime, provide breaks and meal periods and provide a breakdown of her hours worked and how her pay was calculated.

The facility asked the court to move the case into arbitration, arguing that Rosita had freely signed the arbitration agreement and ac­­knowledged getting a copy of the handbook containing the arbitration provision.

The court refused to send the case to arbitration. It cited the take-it-or-leave-it nature of the agreement, with no opportunity to negotiate the provisions. In addition, the agreement only provided for arbitration of the employee’s claims; the employer was free to pursue its own claims in court. The court said that made the agreement too one-sided to be enforced. (Serdenia v. Granada Hills Convalescent Hos­­pital, No. B243074, Court of Appeal of California, 2nd Appellate Dis­­trict, 2013)

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