Ralphs Grocery Company’s Arbitration Agreement Found Unconscionable.

In her application for employment at a grocery chain, a woman signed an agreement to arbitrate any disputes. One of the provisions permits the grocery chain to unilaterally modify its arbitration policy without notice. Another specifies that each party must bear its own costs and fees. Another provides for a complicated procedure for selecting an arbitrator. The district court denied the grocery chain’s petition to arbitrate and the Ninth Circuit affirmed, stating: “In addition to the problematic cost provision, [the grocery chain’s] arbitration policy contains a provision that unilaterally assigns one party (almost always [the grocery chain]. . .) the power to select the arbitrator whenever an employee brings a claim. . .[¶] . . . . If state law could not require some level of fairness in an arbitration agreement, there would be nothing to stop an employer from imposing an arbitration clause that, for example, made its own president the arbitrator of all claims brought by its employees. Federal law favoring arbitration is not a license to tilt the agreement process in favor of the party with more bargaining power.”  (Chavarria v. Ralphs Grocery Company  (Ninth Cir.; October 28, 2013) 733 F.3d 916.)