In Sparks v. Vista Del Mar Child and Family Services, the Court of Appeals upheld a trial court’s decision denying defendant’s petition to compel arbitration of the wrongful termination claims of its former employee. There, Plaintiff filed a wrongful termination complaint against his former employer. Defendant filed a petition to compel arbitration, alleging the arbitration policy was prominently located in the handbook that was distributed to all employees and Plaintiff acknowledged receipt and review of the handbook. Plaintiff claimed he was not aware of it and was not told about it. The trial court concluded that there was no agreement to arbitrate, explaining that the mere acknowledgement of receipt of the handbook was insufficient to create an enforceable arbitration agreement.

The Court of Appeals agreed with the trial court. The Court held that Plaintiff was not bound by the arbitration clause because that clause was included within a lengthy employee handbook, the arbitration clause was not called to the attention of plaintiff, and he did not specifically acknowledge or agree to arbitration. It also stated that the handbook stated that it was not intended to create a contract. Further, the handbook provided that it could be amended unilaterally by defendant and thus rendered any agreement illusory. Lastly, it held the arbitration clause itself was unenforceable. It ruled that it was procedurally unconscionable as it was a take it or leave clause. It also ruled it was substantively unconscionable because it required the employee to relinquish administrative and judicial rights under federal and state statutes and it made no express provision for discovery rights, and because the AAA rules for the arbitration were not provided.

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