Ajamian v. Cantorco2e. L.P.
203 Cal. App. 4th 771
| Cal. Ct. App. | 2012Background
- Ajamian was hired in Sept 2006 as CantorCO2e's San Francisco office manager and later became a broker under a new employment agreement.
- CantorCO2e maintained a 65-page policies manual including an Arbitration Agreement and Policy; Ajamian did not sign the handbook arbitration agreement.
- In March 2007 CantorCO2e issued an Employment Agreement with an arbitration clause for three arbitrators in New York under NASD/AAA rules and New York law; the agreement was not negotiated and signed in Dec 2007.
- Section 8 of the Employment Agreement states arbitration is the exclusive remedy, with limits on damages and a liquidated-damages provision favorable to CantorCO2e; Section 11 imposes attorney-fee shifting to the employee.
- On Aug 31, 2009 CantorCO2e gave notice of termination of the Employment Agreement effective Mar 1, 2010, after which Ajamian became an at-will employee governed by company policies; she left employment April 16, 2010.
- Ajamian filed suit Sept 8, 2010 alleging multiple California wage-and-hour and FEHA claims; CantorCO2e moved to compel arbitration; the trial court denied the petition to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides the enforceability of the arbitration provision | Ajamian argued the court, not the arbitrator, should decide unconscionability. | CantorCO2e argued the arbitration panel should decide enforceability if there was a clear and unmistakable delegation. | Court, not arbitrator, decides unconscionability because delegation was not clear and unmistakable. |
| Unconscionability of the Employment Agreement arbitration clause | Ajamian contends the clause is procedurally and substantively unconscionable and not severable. | CantorCO2e contends unconscionability is not proven or severable. | Arbitration clause deemed procedurally and substantively unconscionable; severance not possible; entire provision unenforceable. |
| Arbitration under the Handbook as alternative | Ajamian was not bound by the Handbook arbitration clause because she did not sign it and the Employment Agreement had ended. | Handbook arbitration should apply after termination under section 4. | Handbook arbitration not enforced; no binding agreement signed by Ajamian. |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (Cal. 2000) (unconscionability elements; adhesion contracts; severability guidance)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (clear and unmistakable standard for arbitrability delegation)
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (U.S. 2010) (heightened standard; delegation to arbitrator requires clear evidence; context of franchise-like delegation)
- Prima Paint Corp. v. Flood & Conklin, 388 U.S. 395 (U.S. 1967) (separation of arbitration validity from contract validity; arbitrator fraud issues distinct)
- Sanchez v. Western Pizza Enterprises, Inc., 172 Cal.App.4th 154 (Cal. App. 2009) (ambiguity on delegation; arbitration scope under California law)