Is Your Employer’s Arbitration Agreement Unfair? Know Your Rights!

At WorkRight Law, we fight for employees who are pressured into signing unfair arbitration agreements. If your employer is trying to enforce one of these agreements against you, it’s crucial to know your rights.

When Arbitration Agreements Are Unfair

Arbitration agreements can be deemed unconscionable—unfair and one-sided—if they are both procedurally and substantively oppressive. Procedural unconscionability arises when an employee is forced to sign an agreement without meaningful choice, while substantive unconscionability occurs when the terms heavily favor the employer.

In Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, the California Supreme Court emphasized that arbitration agreements must be fair to both parties. If an agreement is deemed unconscionable, it may be unenforceable.

Case Study: De Leon v. Pinnacle Property

In a key case, De Leon v. Pinnacle Property, an employee sued for violations of California Labor Code. The court found the employer’s arbitration agreement unenforceable due to its unconscionable terms. The agreement had provisions that were heavily stacked in the employer’s favor, which made it both procedurally and substantively unfair.

Moreover, the court determined that there was no severability in the arbitration agreement. Severability refers to the ability to strike down only the unconscionable parts of the agreement and leave the rest intact. However, in this case, the court concluded that the unconscionable provisions were so central to the agreement that the entire arbitration clause had to be invalidated. This meant the employee was free to pursue their claims in court instead of being forced into arbitration.

Why Severability Wasn’t an Option

The court determined that because the unfair terms of the arbitration agreement were too intertwined with the overall structure of the agreement, they could not be removed without changing the very nature of the agreement. This made the agreement entirely unenforceable. If an arbitration agreement is so biased toward one side, it cannot be corrected by merely striking certain provisions, and the entire agreement must be thrown out.

What This Means for You

If your employer’s arbitration agreement contains unfair terms—such as one-sided discovery limits or excessive fees—it may not be enforceable. And if those terms are central to the agreement, there may be no way to sever them and still have a valid agreement. This means you have the right to take your case to court instead of being forced into an arbitration process that heavily favors your employer.

Let WorkRight Law Protect Your Rights

If you’re facing an arbitration agreement that seems unfair or your employer has violated your rights, WorkRight Law can help. We represent employees in California who are subjected to unfair arbitration practices, wrongful termination, discrimination, harassment, and other workplace violations.

Call us today at (562) 760-8803 or visit WorkRightLaw.com to schedule a free consultation. Let us fight for your rights and ensure you’re treated fairly in the workplace.

This revised version includes the explanation of why severability didn’t apply and ties in the relevant legal context, emphasizing the unconscionable nature of the agreement and the court’s reasoning.