California Court Enforces Arbitration Agreement
By Candice Boyd
In Dotson v. Amgen, Inc., the Court of Appeal for the Second Appellate District, Division Six held that an employment arbitration agreement was an enforceable contract. The California court reversed a trial court's order denying an employer's motion to compel arbitration. The Court of Appeal held that the arbitration agreement entered into between an employer and employee was not unconscionable. In reaching its decision, the Court of Appeal evaluated whether the arbitration agreement's terms were both procedurally and substantively unconscionable. The Court of Appeal found that there was no substantive unconscionability in a provision in the arbitration agreement that limited the parties to one deposition each, unless the arbitrator determined that more were needed. The Court of Appeal reasoned that this provision was reasonable and merely manifested one of the goals of arbitration - to be a streamlined process. One of the ways this goal is achieved is by setting limitations on discovery. Also, the Court of Appeal determined that the trial court wrongly assumed that the arbitrator would be unfair in determining whether additional depositions were needed, "We assume that the arbitrator will operate in a reasonable manner in conformity with the law."
The Court of Appeal found that the existence of procedural unconscionability was minimal because the agreement was not overly long, the agreement was written in unambiguous language, and Dotson was a highly educated attorney with the ability to understand that he was agreeing to arbitration.
Even if it assumed that the discovery provision in the agreement was unconscionable, the Court of Appeal determined that the trial court abused its discretion by failing to take it out of the agreement. "Where, as here, only one provision of the agreement is found to be unconscionable and that provision can easily be severed without affected the remainder of the agreement, the proper course is to do so."
This decision provides a positive message to employers – some courts are willing to enforce arbitration agreements. In order to increase the likelihood that an arbitration agreement will be enforced, employers must ensure that the agreement satisfies at least minimal standards of fairness, including sufficient discovery.