According to the California Court of Appeal, plain language in an arbitration agreement that indicates a lack of mutuality will be considered substantively unconscionable, and the later willingness of the unbound party to be mutually bound to the agreement does not abate that unconscionability.

In Pronovost v. Aurora Loan Services, No. D049196, 2008 WL 142583 (Cal. Ct. App. Jan. 16, 2008), Pronovost sued Aurora for wrongful termination. Aurora moved to compel arbitration pursuant to an arbitration agreement on the back of Pronovost's employment application. In opposing the motion, Pronovost argued that the arbitration agreement lacked mutuality and was thus unconscionable. The trial court denied the motion on that ground.

On appeal, the Court found that the agreement was procedurally unconscionable because Pronovost had no meaningful opportunity to negotiate the terms. The Court next considered whether the agreement lacked mutuality. Since the agreement used the plain language, "I [Pronovost] hereby agree that any controversy… shall be submitted to arbitration," and required only Pronovost's signature, the Court found evidence that Pronovost, but not Aurora, was obligated to arbitrate. According to the Court, the agreement thus lacked "sufficient mutuality to satisfy a basic fairness test."

The Court rejected Aurora's contention that it was equally obligated to arbitrate by implication. Additional language in the agreement, according to the Court, provided Aurora with a potential basis for avoiding arbitration by preserving the right to litigate if Pronovost failed to abide by the terms.

Aurora maintained that the preservation of litigation language only applied to motions to compel should Pronovost fail to abide by the arbitration agreement, but the Court read the use of "terms" in the plural as preserving the right to litigation to enforce all "terms" of employment, and not the singular "term" within the arbitration agreement. This lack of mutuality rendered the arbitration agreement substantively unconscionable.

Also, the Court was not persuaded by Aurora's willingness to arbitrate its own claims after the fact; it considered this later willingness to be, at best, an attempted modification of the original agreement which was never accepted by the other party.

Emphasizing its preference for clear and mutual arbitration agreements, the Court stated that "if the mutuality of an arbitration provision cannot be established unless a court must make numerous leaps of logic through implications and assumptions, [a court] cannot conclude it is a fair and mutual provision."