Zullo v. Superior Court
197 Cal. App. 4th 477
| Cal. Ct. App. | 2011Background
- Zullo sued Inland Valley Publishing for wrongful termination under FEHA; arbitration was compelled by the superior court and proceedings stayed.
- Handbook containing an arbitration policy was given to Zullo; she allegedly signed an acknowledgement of receipt.
- Arbitration policy mandates final and binding arbitration for disputes arising from termination and most statutory claims, with a one-year arbitration request window and 10-day response requirement.
- Petitioner challenged the motion to compel arbitration as unconscionable and attacked the authenticity of the receipt acknowledgement; the court rejected the authentication challenge and found no unconscionability.
- Court reviews de novo to determine enforceability of the arbitration agreement; holds the policy is procedurally and substantively unconscionable and unenforceable as written.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the arbitration agreement unenforceable due to unconscionability? | Zullo: agreement is a contract of adhesion and one-sided. | Inland: policy is mutual and enforceable as a contract under the handbook. | Arbitration agreement is unconscionable and unenforceable. |
| Does lack of mutuality and one-sided terms invalidate the arbitration clause? | Lack of mutuality and one-sided time limits favor Inland. | Policy is reciprocal within the context of arbitration rules. | Lack of mutuality invalidates the agreement. |
| Does failure to attach AAA rules or provide notice affect procedural unconscionability? | Nonattachment increases procedural unconscionability; failure to attach rules burdens employee. | No attachment evidence; still not dispositive. | Procedural unconscionability supported; unenforceable as written. |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000) (required bilaterality; unconscionability analysis in employment arbitration)
- A & M Produce Co. v. FMC Corp., 135 Cal.App.3d 473 (1982) (one-sided risk allocation in contract unconscionability)
- Stirlen v. Supercuts, Inc., 51 Cal.App.4th 1519 (1997) (unconscionability factors—oppression and surprise)
- Harper v. Ultimo, 113 Cal.App.4th 1402 (2003) (failure to attach arbitration rules supports procedural unconscionability)
- 24 Hour Fitness, Inc. v. Superior Court, 66 Cal.App.4th 1199 (1998) (mutual arbitration terms and enforcement standards)
- Engalla v. Permanente Medical Group, Inc., 15 Cal.4th 951 (1997) (review of unconscionability standards in arbitration)
- City of Los Angeles v. Superior Court, 193 Cal.App.4th 1159 (2011) (contract interpretation in arbitration context)
- Duffens v. Valenti, 161 Cal.App.4th 434 (2008) (evidentiary and contractual interpretation aspects in arbitration)
- United Public Employees v. City and County of San Francisco, 53 Cal.App.4th 1021 (1997) (contract interpretation and arbitration statute considerations)