California Arbitration Agreement Unconscionable

Arsen Hovanesyan is a licensed physician who, on March 28, 2011, worked as a cardiologist for glendale Internal Medicine and Cardiology Medical Group. He signed a nine-page written employment contract that contained a provision that „all disputes“ arising from the agreement „will be settled through a final and binding arbitration procedure as an exclusive remedy.“ The recent decision of the First Appellate District of California found that the arbitration agreements reached by TWC Dealer Group, Inc. were procedurally and materially unworkable. Davis, et al. v. TWC Dealer Group, Inc., et al. (2019) WL 5586867. In summary, an arbitral provision must be as neutral and reciprocal as possible to increase the likelihood that an arbitral decision will not be considered substantially unacceptable. All restrictions imposed on the worker should also be imposed on the employer. All benefits, rights or remedies granted to the employer should also be granted to the worker.

But on the merits, the California Supreme Court has departed from the preliminary proceedings` analyses. Although the court recognized that the parties` arbitration agreement could be appropriate in a case of unlawful dismissal in which no Berman proceedings are available, the court found that the arbitration agreement on the worker`s wage claim was largely unacceptable, as arbitration was less accessible and affordable than the state`s legal process. In particular, the arbitration agreement has sought to confer similar rights on those authorized by traditional litigation (a mark for the identification of materially concionable agreements in accordance with previous jurisprudence), including the requirement for a retired state judge to act as an arbitrator and the availability of all vehicles for the investigation and movement of vehicles provided for by state law. However, the Tribunal found that these provisions made the process more complex and time-consuming and represented an unfavourable contrast to the Berman procedure (see chart below). On this basis, the Tribunal found that the arbitration agreement was largely unacceptable. In this regard, the Tribunal noted that the waiver of the arbitration agreement at berman trial was not unacceptable in itself (and, in fact, it would be immediately contrary to AT-T Mobility LLC v. Concepcion 563 U.S. 333 (2011), but the arbitration procedure must provide an accessible and affordable forum for the settlement of wage disputes in exchange for the employee`s waiver. The California Court of Appeal rejects an employer`s request to regulate a worker`s rights to discrimination, harassment and compensation and has ruled that the courts, not arbitrators, have the power to decide whether an arbitration agreement is unacceptable.

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