|
A federal district court in Washington has rejected a former employee’s unconscionability challenge, noting the arbitration agreement at issue was clear, conspicuous, and preserved the parties'statutory remedies.
In Huang v. Washington Mutual Bank, No. C07-0736RSM, 2008 WL 4103918 (W.D. Wash. Aug. 25, 2008), Huang applied for a job with Washington Mutual Bank (WaMu). The application contained an agreement to abide by all employment policies upon hiring and included a notice that an arbitration agreement was required as a condition of employment. One week later, WaMu sent an offer of employment and separate arbitration agreement to Huang, which he signed and accepted. After some confusion arose with Huang’s work visa, Huang executed these documents a second time one month later.
After approximately seven months at WaMu, Huang asserted that he was constructively discharged and sued WaMu for employment discrimination. In response, WaMu filed a motion to compel arbitration. Huang opposed the motion on unconscionability grounds.
The Court found the language of the arbitration agreement "could not be any clearer," and that Huang’s claims all fell within the agreement’s scope. The Court then turned to Huang’s unconscionability arguments.
As to procedural unconscionability, Huang argued that the agreement was adhesive and that he lacked any meaningful choice when signing it. The Court found "no impropriety surrounding the formation" of the arbitration agreement, noting that Huang was presented with the same agreement on two separate occasions, and had ample opportunity to review the document and seek legal advice if needed each time.
Huang also asserted his "limited fluency in English" as a defense, but the Court found Huang "more than capable of understanding English" in his initial pro se complaint. Regardless, the Court observed "limited fluency in English does not excuse a party from his affirmative obligation to understand a contract before signing it."
The Court also found the agreement "clear in its purpose and scope," noting that the agreement was a separate document from the offer of employment, not inconspicuous or hidden, and amounted to only two pages of text.
As to substantive unconscionability, Huang asserted that the "cost-sharing" provision in the agreement was oppressive because it required both parties to bear their own costs. However, the Court found this "cost-sharing" provision "simply provides each side with the right to obtain counsel for arbitration at its own expense." Because nothing in the language of the agreement precluded a party from receiving an award including attorney fees as provided by Rev. Code Wash. 49.60.030(2), the Court held the agreement was not substantively unconscionable.
Accordingly, the Court granted the order compelling arbitration of all of Huang’s claims and stayed further proceedings.
Subscribe to a free weekly update on ADR case law and
legislation
|