Unconscionability in Employment Arbitration Clauses The Ninth Circuit’s May 14, 2007 decision in Davis v. O’Melveny & Myers, no. 04-56039, 2007 DJDAR 6741, is of interest because it provides a detailed analysis of unconscionability under California law in an employment arbitration provision; more importantly, it is one more in a line of appellate cases which affirm that the courts have no hesitancy in invalidating one-sided arbitration agreements. (See, for example, Armendariz v. Foundation Health Psychcare…
THREE EASY STEPS TO A SUCCESSFUL ARBITRATION Be familiar with the terms of the arbitration clause in the operative agreement. The location, scope, costs and possible success of the arbitration will be impacted by the existence or non-existence of language in the arbitration clause mandating where and before whom the arbitration shall be conducted;
LEGAL ERRORS IN ARBITRATION CANNOT BE REVIEWED (PART II) At the conclusion of Arbitration Insight no. 5, I observed that “The continuing moral of (recent case law, including Baize v. Eastridge Companies (2006) 142 Cal.App.4th 293) is if attorneys want to have the right to challenge an arbitrator’s application of the law, they must not only require the arbitrator to apply the law in question but also agree to judicial review of that application.” Cable…
ARBITRATION AWARD NOT REVIEWABLE FOR ERRORS OF LAW While not establishing new law, the recent decision of Baize v. Eastridge Companies (2006) No. B185823, 2006 DJDAR 11430, provides a good reminder that, absent an exception, “[a]n arbitrator’s award is not reviewable for claimed errors of law.”
ARBITRATION CLAUSE UNCONSCIONABILITY Higgins v. Superior Court (2006) 140 Cal.App.4th 1238 is a text book example of how the courts may apply Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 guidelines for determining whether an arbitration provision is unconscionable. For ease in following Higgins, I have provided the relevant Armendariz language, without quotation marks and internal citations, concerning unconscionability:
TRIAL DEMAND AFTER FEE ARBITRATION IS STRICTLY CONSTRUED In an opinion that may have implications far beyond mandatory fee arbitrations, the California Supreme Court has held that Code of Civil Procedure section 473(b) cannot remedy a failure to meet the 30-day deadline for seeking a trial de novo following arbitration pursuant to Business and Professions Code section et seq. 6200 (the MFAA).
MATTERS THAT MUST BE DISCLOSED BY NEUTRAL ARBITRATORS Arbitration Insight No. 1 discussed the statutory grounds for requiring neutral arbitrators (party arbitrators are not covered) to make certain disclosures in contractual and commercial arbitrations. Insight No. 2 reviews what information those disclosures must provide.
WHEN DISCLOSURES BY NEUTRAL ARBITRATORS ARE REQUIRED After attorneys have selected an arbitrator to preside over either a contractual or consumer arbitration, they should receive a disclosure checklist from the arbitrator that provides possible grounds for his or her disqualification.