What is ‘Unconscionability’ in an Employment Contract and What Can it Mean to My California Discrimination or Wrongful Termination Lawsuit?

If you’ve been the victim of discrimination at work or have otherwise been wrongfully terminated from your job, you obviously face many challenges and numerous stresses in your life. One of them may be an employer who seeks to prevent you from getting your day in court by instead forcing your dispute into arbitration. Don’t let that happen without a fair legal fight, and don’t try to handle that stressful challenge on your own. Be sure you have an experienced Oakland employment attorney on your side advocating for you.

Recently, the case of a San Francisco law partner who alleged that she was the victim of sex discrimination was again in the news, as mid-June 2019 brought the filing of a flurry of amicus briefs supporting the employer in this case. To recap, the California Court of Appeal ruled in favor the employee last year, concluding that the employer was not entitled to demand that the two sides resolve their Fair Employment and Housing Act dispute through arbitration, even though the partner’s agreement with the firm called for arbitration of disputes like FEHA discrimination claims. (In this circumstance, the partner had alleged that the firm had effectively forced her out of her job due to her being a woman.)

The reason that the partner won in the appeals court was a legal concept that is known as “unconscionability.” In contract law, a contract or contract provision is unconscionable if it is so one-sided as to be unreasonable. The partner’s arbitration agreement was not enforceable because it contained unconscionable terms related to payment of arbitration costs and attorneys’ fees. It also contained an unconscionable confidentiality term that could impair the lawyer’s ability to interview witnesses.

‘Take-it-or-leave-it’ negotiating tactics may make an agreement unenforceable

In California, there are two types of unconscionability. Those are procedural unconscionability and substantive unconscionability. A contract or contract clause can be procedurally unconscionable if the negotiation process that led to its ratification was so extreme as to be unreasonable.

An example of this was a case from 2017 involving a Southern California doctor and the internal medicine and cardiology practice group he joined in 2011. At that time, the agreement the group offered to him contained an arbitration provision and the contract offer was wholly a “take-it-or-leave-it” deal. That type of negotiation and offer, according to the court in the doctor’s lawsuit, was an example of procedural unconscionability.

An agreement that forces the employee to pay too much in costs, attorneys’ fees may be unenforceable

Substantive unconscionability regards the actual terms themselves, not the process that led to execution of the contract. This happens when the terms are excessively one-sided and harsh toward one party. For example, in the doctor’s case, the agreement forced the doctor to bear all of the costs of the arbitration. This was substantively unconscionable, according to that court.

Obtaining a full and fair recovery for the harm you suffered as a result of improper workplace discrimination or wrongful termination is challenging enough. It may become even more so if your employer is able to force you into an unfavorable setting for resolution, such as an arbitration hearing. Be prepared for whatever steps your former employer takes by having skillful counsel working for you. Reach out to the knowledgeable Oakland employment attorneys at the Law Offices of Stephen M. Fuerch. We have helped many people harmed by employment discrimination and wrongful termination and are ready to get to work for you. To learn more about how we can help you, contact us through our website or call our office at (925) 463-1073 to schedule your confidential initial consultation today.