Tran v. Integra LifeSciences Corp. CA4/3
G051620
| Cal. Ct. App. | Aug 18, 2016Background
- Tran sued Integra for employment discrimination and wrongful termination in California; the alleged acts occurred in California and the complaint referenced G.C. 12940 claims.
- Defendants moved to compel arbitration based on an Applicants Agreement signed by Tran when applying for IsoTis OrthoBiologics, Inc. in 2006, later claimed superseded by an Invention Agreement signed in 2008.
- The Invention Agreement contains a broad arbitration clause and New Jersey governing law, with unilateral terms favoring the Company and a venue/jurisdiction clause.
- The trial court found the Invention Agreement controlling and unconscionable, refusing to sever unconscionable terms; it rejected revival of the earlier Applicants Agreement.
- The court treated the question of which arbitration clause controls as a contract-interpretation issue reviewed de novo, and held the later agreement was operative and unconscionable; no revival of the earlier clause occurred.
- The appellate court affirmed, noting an intervening integrated agreement without an arbitration clause and lack of explicit binding language on parties other than Tran.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which arbitration clause governs Tran’s claims | Tran argued the Invention Agreement controls | Defendants argued the Applicants Agreement governs unless superseded | Invention Agreement governs; later provision controlling |
| Unconscionability of the Invention Agreement | Provision is unfair and unilateral, with forum and lack of mutuality | Arbitration provisions are generally enforceable and not unconscionable | Arbitration provision unconscionable; not enforceable |
| Whether the 2006 Applicants Agreement was superseded | The Invention Agreement could supersede the Applicants Agreement | Only a writing signed by the company president could supersede | Invention Agreement supersedes; Applicants Agreement not revived |
| Revival of the Applicants Agreement if Invention Agreement is voidable | If Invention Agreement fails, the earlier provision could revive | Revival would occur; but offer letter and entities limit applicability | No revival; offer letter and corporate structure negate revival |
| Effect of integrated agreements and party identity on arbitration scope | Company includes Integra and subsidiaries; arbitration should cover all | Only Tran signed Applicants Agreement; not all entities bound | Arbitration clause limited; not binding on all Defendants |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare, Inc., 24 Cal.4th 83 (Cal. 2000) (unconscionability and bilateral arbitration requirements; sealing factors; severability guidance)
- Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th 1109 (Cal. 2003) (unconscionability standard; procedural and substantive elements; sliding scale)
- Rebolledo v. Tilly’s, Inc., 228 Cal.App.4th 900 (Cal. App. 4th 2014) (modification signature requirements limited to specific at-will provision)
- Grey v. American Management Services, 204 Cal.App.4th 803 (Cal. App. 4th 2012) (integration clause effect; supersession concept explained)
- Mercuro v. Superior Court, 96 Cal.App.4th 167 (Cal. App. 4th 2002) (court discussed unilateral terms and injunctive carve-outs in IP contexts)