The trial court erred in compelling Ramos, a successful lawyer, to arbitrate her sex discrimination, retaliation, and other claims against Winston & Strawn. Though the partnership’s arbitration clause (which required arbitration of disputes arising from or relating to the partnership agreement or partnership) was broad enough to encompass Ramos’ employment discrimination and retaliation claims, the clause was unconscionable and unenforceable. Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 is still good law post-Concepcion. It governs this arbitration clause even if Ramos is not an “employee” since the imbalance of bargaining power, in this case, is similar to the typical employment relationship and Ramos sues under the same anti-discrimination statutes. The arbitration clause was an adhesion contract as it could not effectively be negotiated, but the degree of procedural unconscionability was slight. However, four parts of the arbitration clause were unconscionable: the clause requiring Ramos to pay half the arbitration costs, the clause requiring Ramos to pay her own attorney fees, the clause restricting the ability of the panel of arbitrators to “override” or “substitute its judgment” for that of the partnership, and the clause requiring confidentiality in all arbitration proceedings. These clauses, particularly, the no override clause, could not be severed, so the whole arbitration agreement was unenforceable.
California Court of Appeal, First District, Division 1 (Margulies, J.); November 2, 2018 (modified November 28, 2018); 28 Cal. App. 5th 1042