Court strikes down unconscionable arbitration agreement

Almost every employment arbitration agreement is provided on a take-it-or-leave-it basis, so it will be deemed procedurally unconscionable. It makes matters much worse if you provide a Spanish-speaking employee with an agreement written in English. If the agreement also contains substantively unconscionable terms, it won’t be enforced. Here is a case study in what not to do when preparing and presenting an arbitration agreement to your employees.

Facts

Cycad Management LLC hired Jose Merced Nunez as a gardener in 2018. It required him to sign an agreement mandating the arbitration of “all disputes between Employee and Company relating, in any manner whatsoever, to the employment or termination” of the employee. The agreement stated it:

• Encompasses wage, tort (personal injury), statutory, discrimination, and contract claims;
• Limits discovery (pretrial fact-finding) to “three depositions and an aggregate of thirty (30) discovery requests of any kind, including sub-parts”; and
• Awards attorneys’ fees to the prevailing party.

Nunez filed a lawsuit against Cycad raising a series of employment issues, and the employer moved to compel arbitration. The trial court found the agreement unconscionable and refused to enforce it.

Why trial court wouldn’t enforce arbitration agreement