In a recent opinion by a California Court of Appeal, Jenkins v. Dermatology Management, LLC, the court affirmed that certain arbitration agreements can be deemed unenforceable when they are found to be unconscionable. This ruling serves as a crucial reminder to employees that you may have certain rights despite what an arbitration agreement might say. 

In Jenkins v. Dermatology Management, LLC, the arbitration agreement in question was determined to be both procedurally and substantively unconscionable.

Procedural unconscionability involves circumstances where the process by which one enters into an agreement. Often in an employment context, a contract of adhesion—which is a contract imposed and drafted by the party of superior bargaining strength which must be accepted to without the opportunity to negotiate to receive the benefit of the agreement– will be considered procedurally unconscionable. For example, when a prospective or new employee must sign certain agreements as a condition to get a job, including those presented as a non-negotiable part of an employment packet. This was the case for the employee in  Jenkins v. Dermatology Management, LLC. Although a manager was available to answer questions from the employee, the agreement had already been signed on behalf of the employer, which would have indicated to a reasonable person that the agreement was offered as a take-it-or-leave it proposition. The court also acknowledges that few employees are in a position to refuse a job because of an arbitration requirement.

Substantive unconscionability relates to the fairness of the arbitration terms themselves. In Jenkins v. Dermatology Management, LLC, the court highlighted several unfair provisions:

• Lack of Mutuality: The employee was required to arbitrate all her claims against the employer, whereas the employer was not bound to arbitrate all its claims.
• Shortened Statute of Limitations: The agreement unfairly reduced the time frame within which an employee could bring a claim.
• Excessive Costs: The requirement for employees to share arbitration costs exceeded those that the employee would have to pay if she were to file in court. 
• Restrictive Discovery: The agreement unreasonablely limited the ability of parties to gather evidence through discovery.

Ultimately, despite the wording of the arbitration agreement and the insistence of the employer that the employee must arbitrate her claims, the court found that the process in which the employee had to sign the agreement and the provisions in it rendered the agreement unenforceable.

One of the lessons to learn from this case is that, while arbitration agreements are generally favored for their efficiency in resolving disputes, it does not necessarily mean that an employee will be compelled to arbitrate them. Employees should be aware that they may have rights and options, even when faced with seemingly binding arbitration clauses. 

Indeed, if an employee is worried about asserting his or her rights and seeking justice because of the provisions of an arbitration agreement, such as one implying the employee must split the cost of the arbitration, that employee should seek competent legal counsel to evaluate the agreement and his or her claims. Each situation is unique, and the interpretation of legal agreements can vary based on individual circumstances. Consulting with a qualified employment attorney can provide you with guidance in what your rights are and how to assert them.