Will California Secede from the [Arbitration] Union?
California courts have been narrowing the enforceability of arbitration agreements in adhesion contracts, especially in employment contracts used by employers with numerous at will employees.
The problem is caused because of the inability of the average employee in the United States, or anywhere, to read the foregoing sentence and understand words like “adhesion,” and even words like “at will” and “arbitration.” Employees that go to work for employers of numerous employees often have employment handbooks or sign employment documents, like applications, that contain arbitration clauses. However, from now on, in California, if the employment documents contain a clause purporting to strip the employee of the right to bring a class action, the clause is void. Further, no arbitration clause that depends upon a prohibition of a class action can trump the right to bring a class action. Lisa Murphy v Check ‘N Go of California, Inc., Cal. App., A114442, October 17, 2007. To read this decision, you can find it here.
This opinion is one of a numerous series of cases that have defined the substantive or procedural unconscionability of arbitration clauses.
