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Melissa Wisdom et al v. Accentcare

January 3, 2012

MELISSA WISDOM ET AL., PLAINTIFFS AND RESPONDENTS,
v.
ACCENTCARE, INC. ET AL., DEFENDANTS AND APPELLANTS.



APPEAL from a judgment of the Superior Court of Sacramento County, Steven H. Rodda, Judge. Affirmed. (Super. Ct. No. 34-2009-00063028CU OE GDS)

The opinion of the court was delivered by: Blease , Acting P. J.

CERTIFIED FOR PUBLICATION

In this case we decide that a clause in an application for employment with AccentCare, Inc. (AccentCare), requiring only the applicant agree that, if hired, all disputes that cannot be resolved informally will be submitted to binding arbitration is both procedurally and substantively unenforceable as unconscionable.

A court can refuse to enforce an unconscionable provision in a contract. (Civ. Code, § 1670.5.) A provision is unenforceable if it is both procedurally and substantively unconscionable. A contract can be procedurally unconscionable if it is oppressive due to the unequal bargaining power of the parties. In this case, the preemployment arbitration agreement is procedurally unconscionable. "[F]ew employees are in a position to refuse a job because of an arbitration requirement." (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 115.)

We shall conclude that in addition to the procedural unconscionability of the pre-employment agreement to give up the right to trial, the agreement at issue was procedurally unconscionable because its language implied there was no opportunity to negotiate, because the rules of any arbitration were not spelled out in the agreement or attached thereto, and because plaintiffs did not understand they were waiving their right to a trial, nor was that fact explained to them.

We shall further conclude that the agreement was substantively unconscionable because it lacked mutuality. The lack of mutuality is made apparent by contrast to a different application form, also employed by AccentCare, which provided that "in exchange for my agreement to arbitrate, AccentCare, Inc. also agrees to submit all claims and disputes it may have with me to final and binding arbitration . . . ." "[I]n the context of an arbitration agreement imposed by the employer on the employee, such a one-sided term is unconscionable." (Armendariz, supra, 24 Cal.4th at p. 118.)

Because both substantive and procedural elements of unconscionability are present, we shall affirm the trial court ruling finding the arbitration agreement unenforceable.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs were employed by defendant AccentCare as on-call staffing coordinators. Defendant Tera Cummings (formerly Tera Landeros) was their immediate supervisor. Part of plaintiffs' duties included ensuring that all cases remained staffed during off hours. They were required to respond to an off-hour call within 20 minutes.

Plaintiffs filed a complaint for damages, injunctive, and declaratory relief, alleging they were not paid for all of the overtime and time they spent handling off-hour calls. They stated causes of action for breach of implied contract, violation of Labor Code sections relating to the failure to pay wages and provide an accurate wage statement, unfair business practices, unjust enrichment, and promissory estoppel.

Four of the six plaintiffs, Norma and Katrina Rodriguez, Batseba Escoto, and Jessica Bondi, signed acknowledgment forms when they applied for employment with AccentCare. The acknowledgment was the last page of an application form that AccentCare gave plaintiffs, along with several other forms, when plaintiffs applied for a job. The last page of the form consisted of five initialed paragraphs and a signature at the bottom. The heading directed: "Acknowledge Your Understanding of the following Statements and Agreements by Placing Your Initials by Each Paragraph, then Sign and Date Below." The third of the five paragraphs was an arbitration agreement that stated as follows:

"I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by AccentCare, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with AccentCare, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules then in effect of the American Arbitration Association."

Plaintiffs did not negotiate the terms of the application form, nor were the provisions explained to them. They were not told that their signature on the form was optional, nor were they aware of the consequences of signing a binding arbitration agreement.

By contrast Jessica Bondi signed a different, two-page arbitration agreement as a part of a new hire packet. As is relevant, that agreement provided that "in exchange for my agreement to arbitrate, AccentCare, Inc. also agrees to submit all claims and ...


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