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Granting a motion to compel arbitration of an employment discrimination suit, a federal district court in Oregon upheld an arbitration clause while severing a provision that unfairly limited an employee’s access to discovery.
In Hulett v. Capitol Auto Group, Inc., No. CIV. 07-6151-AA, 2007 WL 3232283 (D. Or. Oct. 29, 2007), Hulett sued Capitol on behalf of her deceased husband’s estate for age and disability discrimination her husband allegedly suffered while employed with Capitol. Capitol moved to compel arbitration pursuant to an arbitration clause in the employment contract between Hulett’s husband and Capitol. In opposing the motion, Hulett arguing the arbitration clause was unconscionable.
The Court held that the arbitration clause was valid but severed a provision that limited discovery. The Court found the discovery restrictions, which limited the number of depositions available to either party to three, was substantively unconscionable because it “unreasonably with[held] information from plaintiff that would otherwise be available through discovery, thus hindering her ability to present her claims in an arbitration forum.” The Court concluded this provision favored the employer because the employer was initially more likely to have information regarding the employee’s termination while the employee was more likely to need witnesses in order to build her case.
The Court severed the discovery provision from the contract rather than voiding the contract altogether, as the contract specified that if any part of the contract “is invalid or contrary to law, it will be severed and the remaining parts will continue in full force or effect.” Moreover, Oregon law mandates that a contract’s legal terms remain valid even when a contract does not address severability of illegal terms.
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