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A California appellate court held that an employment arbitration agreement was unconscionable based on its discovery limitations, time limits for initiating arbitration, and its presumption against attorney representation.
In LeBlanc v. White Memorial Medical Center, No. B195611, 2007 WL 4126948 (Cal. Ct. App.2d Nov. 21, 2007), Patricia LeBlanc was employed at White Memorial as a nurse. She signed an arbitration agreement as part of her employment agreement. Subsequent to her resignation, LeBlanc filed suit alleging that she had been constructively terminated. White Memorial moved to compel arbitration.
The trial court denied White Memorial's motion, finding that the agreement was unconscionable due to some of its terms. White Memorial appealed.
This Court agreed with the trial court that the agreement was unconscionable, although it focused on different terms of the agreement.
The Court determined that the contract's procedure regarding time limitations on filing a grievance had the potential of changing the amount of time available in which to pursue legal claims. As the procedure was unclear as to this effect, the Court found it did not "promote the vindication of statutory rights," and was "harsh and can surprise unsuspecting employees."
The Court also held that the possibility that an employee may be denied all discovery except for one deposition "would be highly unfair." See Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000).
Moreover, the presumption against attorney representation was "suspect." The Court concluded that a person initiating complex claims might not realize until after the 15-day deadline imposed by the contract that they needed an attorney. Although White Memorial would also be without legal representation during the arbitration, the Court found they would likely be assisted by legal counsel on the side.
For these reasons, the Court affirmed the denial of White Memorial's motion to compel arbitration.
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