The plaintiff filed a class action wage and hour action under California law.?? The employer moved?? to?? compel?? arbitration?? based?? on?? its arbitration? policy,? which? applicants? acceded? to upon submitting applications.?? The district court refused to enforce the arbitration agreement on the ground? of unconscionability.??? The Ninth? Circuit affirmed.?? It held that the agreement?s provisions requiring the parties split the arbitrator?s fees allowing the Company to effectively pick the arbitrator, and? allowing it to unilaterally modify the policy were all unconscionable and that the agreement was invalid. The ?most ?interesting? part ?of ?the ?opinion was its discussion of Mortensen v. Bresnan Communications ?LLC, ?722 ?F.3d ?1151 ?(9th? ?Cir. 2013), which held that Concepcion preempts unconscionability challenges to an arbitration agreement where the grounds used have a disproportionate impact on arbitration agreements. The panel held Mortensen can?t mean that a legal rule that invalidates a provision of an arbitration agreement that is unique to arbitration, such as giving one party the power to select the arbitrator, is pre-empted. ?The panel reasoned ?invalidation of this term is agnostic towards arbitration.? ?It does not disfavor arbitration; it provides that the arbitration process must be fair.?
The court went on to recognize: ?If state law could not require some level of fairness in an arbitration agreement, there would be nothing to stop an employer from imposing an arbitration clause that, for example, made its own president the arbitrator of all claims brought by its employees.?? Federal law favoring arbitration is not ?a? license? to ?tilt ?the? arbitration ?process ?in favor of the party with more bargaining power.?
Chavarria v. Ralphs Grocery Co., — F.3d — (9th Cir. 10/28/2013) (Clifton, Tallman Callahan)