Non-Severability Clause In Arbitration Agreement Invalidated Entire Agreement

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Kec v. Superior Court, 2020 WL 3869721 (Cal. Ct. App. 2020)

Nichole Kec brought individual, class and Private Attorneys General Act (PAGA) claims against her employer, R.J. Reynolds Tobacco Co., et al.  Kec had signed a predispute contractual waiver of class actions and any “other representative action,” including a PAGA claim. The arbitration agreement further stated that it was “not modifiable nor severable” and that if the representative waiver is found to be invalid, “the Agreement becomes null and void as to the employee(s) who are parties to that particular dispute,” which the court characterized as a “blow-up provision.”  The trial court granted the employer’s motion to compel arbitration of Kec’s individual claims except the PAGA claim.  Kec petitioned the Court of Appeal to issue a writ of mandate overturning the trial court’s order compelling arbitration of her individual claims.  The Court of Appeal issued the writ, holding that the employer could not selectively enforce the arbitration agreement by asking the court to sever the unenforceable PAGA waiver.  See also Aixtron, Inc. v. Veeco Instruments Inc., 2020 WL 4013981 (Cal. Ct. App. 2020) (arbitrator did not have authority to issue pre-hearing discovery subpoenas under California Arbitration Act).

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