How a California Worker Got to Pursue Her Discrimination Case Despite Signing an Arbitration Agreement

Employers may engage in many techniques to prevent employees from suing and winning in cases of discrimination in violation of the Fair Employment and Housing Act. One way of doing that is by stopping employees from suing at all, through the use of mandatory arbitration agreements. While these agreements are generally allowable, California law imposes some restrictions on them. If your employer has demanded that you sign one, it must not impose certain restrictions on you, or it is unenforceable. An experienced California employment attorney can help you analyze your case if an arbitration agreement is involved.

One Bay Area action in which the employee got to pursue her lawsuit despite such an agreement was the case of Maya. Five years after Maya began her employment with an asset investment services company, another entity bought Maya’s employer, and she became an employee of that company. The new employer demanded that all of its employees sign a form that, among other things, included an agreement to resolve employment disputes through a process laid out by the employer. Employees had to sign the form or else lose their jobs. Not wanting to lose the job into which she’d invested half a decade, Maya signed.

By 2011, Maya had risen to a supervisory position. At that point, she objected to certain employee evaluation forms that included age, race, and gender coding, believing that such a practice was discriminatory. Two years later, while she was out on approved medical leave, the employer terminated Maya, who was African-American, and according to her complaint, gave her job to a white male colleague.

Maya then decided to sue the employer for race discrimination under the FEHA. The employer asked the court to stop the lawsuit and instead to compel Maya to arbitrate her claims. The trial court, however, ruled against the employer and allowed Maya’s case to continue. Employment agreements like the one that Maya signed with the employer are governed by the rules that apply to all contracts. In California, those rules include one that says that if a contract is unconscionable, it cannot be enforced. Contracts cannot be substantively unconscionable or procedurally unconscionable. Maya’s was both, according to the trial court.

The employer appealed but lost. Procedural unconscionability is a term that relates to how the agreement was formed. When an employer forces its employees to sign a contract or else lose their jobs, as Maya’s did, that can be a form of procedural unconscionability, according to the appeals court. In these types of situations, the employee has no option to negotiate terms and has no meaningful options, since she could only sign or else forfeit her job of the last five years.

Substantive unconscionability has to do with the specific terms of the agreement. The details of the dispute resolution agreement between Maya and her employer included limitations on discovery, a prohibition against contacting witnesses, and deadlines that functionally shortened the time for pre-litigation investigation. All of these things were more restrictive than a FEHA litigation action in court and restricted Maya’s ability to pursue her case fully.

The court of appeals’ decision to uphold the trial court’s ruling in this case is an important highlight of the limits employers have in contractually restricting employees’ rights (including their rights to pursue discrimination claims under the FEHA) through mandatory arbitration agreements. In other words, if you’ve signed an arbitration agreement, don’t just assume that you have no chance to sue for the discrimination you’ve suffered. Always check with an attorney. Depending on the facts of your case, you may be able to proceed in court despite the agreement.

If you’ve been a victim of any type of workplace discrimination, you need skilled employment attorneys working for you. The Oakland employment attorneys at the Law Offices of Stephen M. Fuerch have been working diligently on behalf of mistreated workers for many years. To learn more about how our team can help you, contact us through our website or call our office at (925) 463-2575 to schedule your confidential initial consultation today.

More Blog Posts:

When Your Employer Can (and Can’t) Force You to Arbitrate Your California Wrongful Termination Case, Oakland Personal Injury Attorney Blog, Nov. 15, 2016

Arbitration Clauses in Employment Contracts and Your California FEHA Violation Claim, Oakland Personal Injury Attorney Blog, Feb. 29, 2016

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