Appellate Court Upholds Trial Court’s Ruling Holding That An Arbitration Provision Is Unconscionable

In Ajamian v. CantorCO2e, the Court of Appeal held that an arbitration provision in an employment contract was both procedurally and substantively unconscionable and the trial court did not abuse its discretion in finding it unconscionable.  It also held the trial court properly found that the unconscionable provisions could not be severed where the agreement was part of a non-negotiated employment contract, the employee was unaware of the excessive costs of arbitration, and the agreement contained a one-sided and unlawful damages clause and a one-sided attorney fees clause.  More interesting, the Court held that the trial court, not an arbitrator, was correct in deciding the issue.  The Court stated that the arbitration provision did not provide clear and unmistakable evidence that the parties intended to delegate authority to the arbitrator, rather than to the court, to decide the threshold issue of whether the arbitration provision itself was unconscionable.

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