Carbajal v. CWPSC, Inc

In Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, the California Supreme Court found the procedural unconscionability had risen to a moderate level based on several factors, one of which was that defendant had not offered to explain the arbitration provision. (Carbajal , supra , 245 Cal.App.4th at p. 244.) All the other reasons related to the defendant's conduct in not identifying, providing, informing her where to find, or giving her an opportunity to read, the applicable AAA rules. (Ibid . ) In that case, the California Court of Appeal agreed with the lower court that an arbitration provision was procedurally unconscionable as a contract of adhesion and because the employer failed to: (1) identify which AAA rules would apply; (2) provide the plaintiff with a copy of those rules; (3) to inform her where should could find the governing rules or give her an opportunity to decide which rules would apply. The appellate court found substantive unconscionability (1) in the provision's distinction between injunctive relief and other relief, impermissibly allowing different remedies in arbitration than would be available in court; (2) in allowing the employer to seek injunctive relief without posting a bond; and (3) in waiving the employee's statutory right to attorneys' fees. (Id.) The Carbajal agreement also had a class-action waiver, a liquidated damages clause, and a cost of arbitration fee-splitting arrangement. (Id.) The lower court was not able to sever the provision because the unconscionability permeated the rest of the agreement. (Id., at 14-15.)