California Labor &
Employment Law Blog

Feb. 24 2011

Court Says Arbitration Agreement With Independent Contractor Invalid

Topics: Arbitration Agreements, Court Decisions

This week a California court held that a mandatory arbitration provision in an independent contractor agreement is subject to the same standards as arbitration agreements in the employment context. In Wherry v. Award, Inc., the court held refused to enforce an agreement to arbitrate between Award, Inc. andtwo of its independent contractors, finding the agreement procedurally and substantively unconscionable under Armendariz standards. The plaintiffs were salespersons who worked for Award, Inc. asindependent contractors.Each of their independent contractor agreements contained a mandatory arbitration provisionfor resolving any disputes between them and Award, Inc. AfterAward, Inc. terminatedthe plaintiffs' services, the plaintiffs sued forgenderdiscrimination and harassment under FEHA. Award, Inc. moved to compel arbitration.

The courtrefused toorder the case to arbitration,finding the arbitration agreement unconscionable and unenforceable. The court reasoned that the agreementwas presented on a take it or leave it basis with no real opportunity to negotiate terms, and included ashortened statute of limitations and afee-shifting provision that were contrary to FEHA. Notably, the courtfurther held that the fact that plaintiffs were independent contractors, not employees, made no difference to the analysis of enforceability of the arbitration agreement.

The Wherry v. Award, Inc. decision is here.

About CDF

For over 20 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

> visit primary site

About the Editor

Robin Largent represents employers, including major food and retail companies, in all types of employment litigation: wrongful termination, retaliation, breach of contract, wage and hour (California Labor Code) and unfair competition. She also regularly counsels and advises California employers on issues of compliance with California and federal employment laws.
> Contact   > Full Bio   Call 916.361.0991


Carothers DiSante & Freudenberger LLP © 2017

About CDFWhat We DoContact UsAttorney AdvertisingDisclaimer