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Court Upholds Invalidation of Pre-Employment Arbitration Clause

In Wisdom v. AccentCare, Inc. 202 Cal.App.4th 591, (2012), the Court held that an arbitration agreement found in a pre-employment application was both procedurally and substantively unconscionable.  The Court held that the arbitration provision was procedurally unconscionable “because its language implied there was no opportunity to negotiate, because the rules of any arbitration were not spelled out in the agreement . . . and because plaintiffs did not understand they were waiving their right to a trial.”  It concluded the agreement was substantively unconscionable because it lacked mutuality.  It concluded that the agreement required the job applicant to agree to arbitrate any claims against the employer, but that there was no corresponding pledge by the employer to arbitrate potential claims against the applicant.  As such, it was unconscionable.

Update: On March 29, 2012, the California Supreme Court indicated that it would review the decision by the appellate court.  Stay tuned to see if the Court announced or clarifies new principles involving pre-employment arbitration agreements.

For more information, or if you need legal assistance, please contact the Wagner Legal Group at info@wagnerlegalgroup.com or (310) 857-5293.

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