Arbitration Agreement Procedurally Unconscionable, But Not Substantively Unconscionable.

The defendant/employer had a multi-level Arbitration Agreement approach to addressing workplace concerns. The first step obligates the employee to bring concerns to the attention of management. If still unresolved, the second step requires a dispute to be presented to a panel of three employees, with each side being given 30 minutes to present its position to the panel who will issue a nonbinding decision. If either side remains dissatisfied, the third step is mediation. The fourth and final step is arbitration, for which the employer “will pay the arbitrator‘s fees and expenses, any costs for the hearing facility, and any costs of the arbitration service.” Plaintiffs/employees contend they were required to sign the arbitration agreement as a condition of employment, and that none of its terms were negotiable. They also contend the arbitration agreement is illusory since the employer may amend it at any time. The trial court found an employment arbitration provision to be unconscionable and denied the employer’s petition to compel arbitration.  The appellate court reversed the order denying arbitration, stating that because plaintiffs were required to sign the arbitration agreement as a condition of employment and were unable to negotiate its terms, they had no meaningful choice in the matter, but concluding: “Although the arbitration agreement is procedurally unconscionable, none of its provisions is substantively unconscionable.” Leos v. Darden Restaurants  (Cal. App. Second Dist., Div. 1; June 24, 2013) 217 Cal.App.4th 473, [158 Cal.Rptr.3d 384].