How To Avoid Drafting An Unconscionable Arbitration Agreement.
We usually summarize opinions, but here, the Court of Appeal does a good job itself of summing up how to draft an enforceable arbitration provision in an employment agreement. The case is Woods v. JFK Memorial Hospital, Inc., G050286 (4/3 Oct. 30, 2014) (Moore, Rylaarsdam, Thompson) (unpublished), in which the Court of Appeal reverses an order granting a motion to arbitrate, on the grounds that the arbitration agreement is both substantively and procedurally unconscionable.
Expressing the Court’s perplexity (exasperation?), Justice Moore explains how to draft an enforceable arbitration agreement:
We are, frankly, perplexed that we continue to see arbitration agreements such as this one. The years since Armendariz have produced a veritable flood of cases about arbitration between employers and employees. Employers should be well aware by now that to insulate their agreements from unconscionability claims, particularly when they are adhesive contracts, there is a simple list of do’s and don’ts. The arbitration agreement should be conspicuous (and preferably labeled as such, in a document separate from a lengthy handbook). The document should be written in plain English, attach or make readily available all referenced documents, be fundamentally fair and mutual, and in all respects abide by the guidance provided in Armendariz. Further, employers should give the employee a meaningful opportunity to review the agreement and decide whether to sign it (meaning a day or two rather than a minute or two). We do not understand why any of this is particularly difficult or challenging for employers, and yet time and time again, our courts see cases with confusing, convoluted and fundamentally unfair employer/employee arbitration schemes that are deemed unconscionable and unenforceable.