Baltazar v. Forever 21, Inc

In Baltazar v. Forever 21, Inc., (2016) 62 Cal. 4th 1237, the California Supreme Court held that an argument based on Forever 21's incorporation by reference of the mediation rules might have force if Baltazar's unconscionability challenge "concerned some element of the AAA rules of which she had been unaware when she signed the arbitration agreement." Id. But because her challenge to the agreement concerned "only matters that were clearly delineated in the agreement she signed," Forever 21's failure to attach the AAA rules "did not affect the Court's consideration of Baltazar's claims of substantive unconscionability." Id. The plaintiff in Baltazar argued "that the arbitration agreement at issue is unfairly one-sided because it lists only employee claims as examples of the types of claims that are subject to arbitration." (Baltazar, supra, 62 Cal.4th at p. 1248.) The Baltazar parties agreed to arbitrate "'any claim or action arising out of or in any way related to the hire, employment, remuneration, separation or termination of Employee,'" and "the disputes subject to arbitration 'include but are not limited to: claims for wages or other compensation due; claims for breach of any employment contract or covenant (express or implied); claims for unlawful discrimination, retaliation or harassment . . . , and Disputes arising out of or relating to the termination of the employment relationship between the parties, whether based on common law or statute, regulation, or ordinance.'" (Ibid.) The Supreme Court disagreed that the agreement lacked mutuality: "The arbitration agreement at issue here makes clear that the parties mutually agree to arbitrate all employment-related claims: that is, 'any claim or action arising out of or in any way related to the hire, employment, remuneration, separation or termination of Employee.' That provision clearly covers claims an employer might bring as well as those an employee might bring. The illustrative list of claims subject to the agreement is just that; the agreement specifically states that such claims 'include but are not limited to' the enumerated claims, thus making clear that the list is not intended to be exhaustive. It thus casts no doubt on the comprehensive reach of the arbitration agreement. It is not particularly remarkable that the agreement's list of examples might highlight certain types of claims that employees often bring, since part of the purpose of the agreement is to put employees such as Baltazar on notice regarding the scope of the agreement, thus eliminating any possible surprise. The examples do not alter the substantive scope of the agreement, nor do they render the agreement sufficiently unfair as to make its enforcement unconscionable." (Id. at p. 1249.)