In a recent development that may make it less difficult for employers to get a state court to enforce an agreement to arbitrate employment disputes, the California Supreme Court has handed down a surprisingly favorable ruling.
Bucking what has been a consistent trend among its state courts, California’s High Court, ruling in Baltazar v. Forever 21, No. S208345 (Cal. S. Ct. March 28, 2016), refused to invalidate a binding arbitration agreement that the plaintiff claimed was so one-sided as to render it unconscionable and therefore unenforceable.
Instead, the Court found that the arbitration agreement in question — which among other things allowed the parties to seek temporary injunctive relief from a state court even while proceeding in arbitration — did not unfairly disadvantage the plaintiff. In particular, the Court rejected the plaintiff’s argument that the “injunctive relief” clause poisoned the entire agreement merely because “such relief more often serves the interests of employers than employees,” noting that the right to seek injunctive relief by either party is expressly provided by state law.
Moreover, to avoid any lingering confusion on that point, the Court took the unusual step of expressly disapproving a 2010 state appellate court ruling that found an injunctive relief provision to be unenforceable precisely because it would be invoked more often by employers.
A copy of the California Supreme Court’s ruling in Baltazar is available online here.
Members of the Equal Employment Advisory Council (EEAC) can read more here.