Arbitration, Defenses To, Unconscionability, Severance Of Unconscionable Provisions, 1, 5
In Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, the Supreme Court held that three portions of Charter’s arbitration agreement were substantively unconscionable: the non-mutual exemption of many employer claims, but few employee claims from arbitration, a shortened statute of limitations and an attorney fee clause that conflicted with the FEHA’s one-way attorney fee provision. On remand, this decision holds that it is questionable whether the non-mutual aspect of the agreement could be cured by severance since severance would subject to arbitration more of the employee’s as well as the employer’s claims, something neither had agreed to. But, more importantly, the decision holds that even if the agreement’s unconscionableness could be cured by severance, it should not be so saved because doing so would not be in the interest of justice as it would encourage the employer to adopt unconscionable provisions and enforce them on unwary employees while still being able, through post-hoc severance, to avoid any penalty for its doing so.