Arbitration/Employment: Agreement With Arbitration Provision Not Unconscionable Because It Had Reciprocal Fees Clause

 

1/1 DCA Reverses Lower Court’s Unconscionability Determination Below.

     In Galen v. Redfin Corp., Case No. A138642 (1^st Dist., Div. 1 July 21, 2014) (published), a lower court found unconscionable an arbitration provision in an employment contract under California law. The appellate court reversed, finding the FAA applied and disagreeing that the provision was unconscionable.

     Interestingly enough, the 1/1 DCA was not particularly troubled by a reciprocal attorney’s fees clause. Even though employee could not be liable for fees on its Labor Code 229 wage claims if employee was unsuccessful in the end (Lab. Code, § 1194(a)), this was not enough to sway the pendulum to the unconscionability alcove.

     For an in-depth discussion of Galen, see co-contributor Marc’s July 21, 2014 post at his blawg entitled California Mediation and Arbitration.