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Employment disputes that fall within the scope of an arbitration clause will not be set aside due to an employee's subjective view that an intervening termination rendered the agreement invalid, nor will they be set aside on unconscionability grounds without a procedural showing of a lack of meaningful choice or a substantive showing of harshness or one-sidedness, according to a Washington federal court.
In Signavong v. Volt Management Corp., No. C07-515JLR, 2007 WL 1813845 (W.D. Wash. June 21, 2007), Volt sought to compel arbitration of Signavong's employment discrimination claim, consistent with an agreement between the parties to arbitrate such disputes. Signavong opposed the motion, claiming that the agreement was only effective during her first term of employment and not during her second term, or, in the alternative, the agreement was unconscionable and therefore unenforceable.
The Court granted the motion to compel arbitration, holding the agreement to be enforceable and not finding the agreement unconscionable.
First, the Court rejected Signavong's claim that she had terminated her initial employment with Volt, was rehired, and her new employment was not subject to her original agreement. The Court held that there was no evidence that Signavong informed Volt of her intent to terminate employment at that time, or of any termination by Volt. "There is no evidence," observed the Court, "that Ms. Signavong notified Volt that she intended to terminate her employment, not that Volt terminated her," and "[w]ithout more, Ms. Signavong's subjective belief that the Agreement expired after her first assignment does not persuade the court to set aside the Agreement."
Second, the Court refused to find the agreement either procedurally or substantively unconscionable. As to procedural unconscionability, the Court acknowledged that "the Agreement likely constitutes an adhesion contract," but that fact was "not dispositive on the question of procedural unconscionability." The Court required that there be a "lack[] of meaningful choice" to find the adhesion contract procedurally unconscionable, and did not find "a maze of fine print,…depriv[ation] of the opportunity to read it," that Signavong "did not understand what she signed," or any other factor indicating a lack of choice.
The Court also declined to find substantive unconscionability due to one-sidedness or harshness. The Court found Signavong's claim that "the costs of arbitration are prohibitively expensive" moot, since Volt had agreed to pay the fees and costs. The Court was also unpersuaded by Signavong's claim that the arbitrator's discretion to award attorney's fees to Volt "dissuade[d] her from vindicating her rights," noting it was "mere speculation…that an arbitrator would disregard case law" on that issue.
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