Arbitration – Labor & Employment – California Law

Hyder v. Inova Diagnostics (Lawyers Weekly No. 13-04-0650, 17 pp.) (Martin Reidinger, J.) 1:13-cv-00018; W.D.N.C.

Holding: Although plaintiff contends he has no specific recollection of ever receiving, reviewing, or signing the “Agreement to Arbitrate Claims,” he does not dispute that the signature on the Agreement is actually his. Plaintiff has not asserted any fraud, imposition or excusable neglect in the formation of the Agreement; therefore, under controlling California law, he cannot avoid the mandatory and binding nature of the Agreement’s terms on the grounds that he cannot recall reading it.

The court grants defendants’ motion to stay pending arbitration.

In the body of the Agreement, this clause appears: “I HEREBY CERTIFY THAT BY SIGNING THIS AGREEMENT, I HAVE BEEN ADVISED TO HAVE THIS AGREEMENT REVIEWED AND EXPLAINED TO ME BY MY OWN INDEPENDENT LEGAL COUNSEL. I HEREBY REPRESENT AND WARRANT THAT I UNDERSTAND AND AGREE THAT BY SIGNING THIS AGREEMENT, [I] AND INOVA ARE BOTH GIVING UP OUR RESPECTIVE RIGHTS TO A CIVIL TRIAL AND A JURY TRIAL.”

This contradicts plaintiff’s argument that he did not have an adequate opportunity to consider the document or confer with legal counsel before signing the document.

Because no consideration is required above and beyond the Agreement to be bound by the arbitration process for any claims brought by the employee, defendant’s promise to arbitrate its own claims is a fortiori adequate consideration for Agreement. Thus, plaintiff’s contention that the Agreement is not supported by adequate consideration is without merit.

Plaintiff has also failed to show that the Agreement is unconscionable.

Generally, inequality of bargaining power alone is not a sufficient reason to hold an arbitration agreement unenforceable. If bargaining inequality alone were sufficient to establish procedural unconscionability, most contracts between an individual and a corporation would be unenforceable.

While plaintiff contends he was not given the chance to negotiate the terms of the Agreement, he offers no evidence to support this contention. In any event, the fact that plaintiff was presented with the Agreement without the ability to offer input as to its terms does not render the Agreement unconscionable under either California or N.C. law. The Agreement is not procedurally unconscionable.

The Agreement requires that plaintiff pay no more than he would pay to bring suit in a judicial forum. Furthermore, although the Agreement has a one-year limitations provision, both California and N.C. courts have upheld truncated contractual limitations periods for state law claims. The Agreement is not substantively unconscionable.

Motion granted.