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Arbitration Agreements Contract Terms Unconscionable Contracts

Ervin Cohen & Jessup LLP

To Sever or Not to Sever, That is the Question For Courts Reviewing Employment Arbitration Agreements for Enforceability

Less than a year ago, the California Supreme Court in Ramirez v. Charter Communications, Inc. opined, in the context of employment arbitration agreements, that there is no bright line rule that requires a court to refuse...more

Benesch

Ninth Circuit Provides Long-Awaited Guidance on Mass Arbitration Provisions

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In the long-awaited newest chapter of case law discussing the validity and enforceability of arbitration clauses and class action waivers, the Ninth Circuit on October 28, 2024, dealt a setback, though not a fatal blow, to...more

Fenwick & West LLP

Ninth Circuit Nixes Live Nation’s ‘Unconscionable’ Arbitration Agreement

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On October 28, 2024, the Ninth Circuit affirmed the district court’s ruling in Heckman v. Live Nation, finding Live Nation’s Ticketmaster arbitration agreement unconscionable and therefore unenforceable based on their terms...more

Kilpatrick

California Supreme Court outlines severance standards for unconscionable contract provisions in arbitration case

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Issues surrounding unconscionability and severance are commonplace in motions to compel arbitration, especially in California. Under California Civil Code section 1670.5, a court has three options when presented with an...more

Ervin Cohen & Jessup LLP

Severing Unconscionable Terms in Employment Arbitration Agreements

In August 2000, the California Supreme Court handed down a landmark ruling that changed the face of employment arbitration agreements going forward. That case, known as Armendariz v. Foundation Health Psychcare Services,...more

Troutman Pepper Locke

EDVA Judge Invalidates Arbitration Clause in Online Terms and Conditions

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In a recent decision, EDVA Judge Rossie Alston invalidated the arbitration clause in the terms and conditions for online sales through the Lowe’s Home Centers website on the grounds that the terms and conditions were illusory...more

Ervin Cohen & Jessup LLP

Overbroad Employment Arbitration Agreements Will Not Be Enforced in California

Arbitration agreements, at their core, are contracts. As with any contract, there must be “mutuality” or, more colloquially, a “meeting of the minds” on what the contract is intended to encompass. For this reason, employment...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

California Appellate Decision Raises New Considerations for Arbitration Agreements

A California appellate court recently denied a motion to compel arbitration, finding the agreement unconscionable in part because it (1) applied to all claims rather than just those arising from employment, (2) was unlimited...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

California Supreme Court Says Severing Unconscionable Terms From Arbitration Agreements Is a Question of Fairness

On July 15, 2024, the Supreme Court of California issued a decision that could provide courts in the state with significant discretion to refuse to enforce employment arbitration agreements even if only one term is determined...more

CDF Labor Law LLP

CA Supreme Court: No Three-Strikes Rule For Enforcement of Arbitration Agreements

CDF Labor Law LLP on

In a recent decision, the California Supreme Court held that courts cannot refuse to enforce arbitration agreements simply by finding that three or more provisions are unconscionable. Rather, courts must use a three-prong...more

Payne & Fears

California Appellate Court Issues Guidance on Enforcing Arbitration Agreements

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While much of the world came to a halt in response to the coronavirus pandemic, the California Courts of Appeal were busy issuing important decisions on the enforceability of arbitration clauses. As the economy starts to...more

Carlton Fields

Southern District of Texas Compels Arbitration Over Insured's Claim that Arbitration Clause was Unconscionable

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The U.S. District Court for the Southern District of Texas recently compelled arbitration despite an insured’s claim that the operative arbitration clause was unconscionable because it required the arbitration panel to...more

Hudson Cook, LLP

Agreeing to Arbitration

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Of the state law defenses, unconscionability is the most often used and most effective legal justification for invalidating arbitration agreements. As a creature of state common law and state versions of the Uniform...more

Carlton Fields

Eighth Circuit Rejects Claim That Arbitration Clause in Retainer Was Unconscionable

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The Eight Circuit has rejected a plaintiff’s claim that an arbitration clause in a retainer agreement she signed with a law firm after receiving a call from a purported agent of the firm informing her of a purported...more

Carlton Fields

Court Enforces Arbitration Agreement Incorporated Into “Notice to Employees”

Carlton Fields on

The U.S. District Court for the Northern District of Texas compelled arbitration in a putative Fair Labor Standards Act class action based on language in a “notice to employees” that put the plaintiffs on notice that they...more

Lewitt Hackman

Can Your Company’s Arbitration Agreement Survive an Unconscionability Inquiry?

Lewitt Hackman on

Concluding that TWC Dealer Group, Inc.’s arbitration agreements were both procedurally and substantively unconscionable, California’s First Appellate District’s recent decision highlights certain contractual terms and...more

FordHarrison

Lessons in Drafting and Implementing an Enforceable Mandatory Arbitration Agreement

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Recently, the California Supreme Court invalidated a mandatory arbitration agreement in OTO, LLC v. Kho (August 29, 2019) finding the agreement was both procedurally and substantively unconscionable. The case involved...more

Payne & Fears

California Supreme Court Casts Doubt on Arbitration Agreements that Require Civil Litigation Procedures for Wage Claims

Payne & Fears on

On August 29, 2019, the California Supreme Court held in OTO, L.L.C. v. Kho, S244630, that a mandatory arbitration agreement may be unenforceable against employee wage claims if it requires the employee to forego the “Berman”...more

Carlton Fields

Court Compels Arbitration Based on Text Message Agreement

Carlton Fields on

A district court has granted a motion to compel arbitration based on an arbitration clause in an agreement sent via text message and agreed to via a reply text. ...more

Carlton Fields

Fifth Circuit Reverses Ruling That Procedural Unconscionability Is Decided by Arbitrator

Carlton Fields on

The plaintiff challenged the formation of an arbitration clause contained in her employment contracts and acknowledgment of employee handbooks, arguing: (1) there was no “meeting of the minds” and therefore there was not the...more

Carlton Fields

Court Finds Confidentiality Provision In Arbitration Agreement Unconscionable, Compels Consumer Arbitration

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The Eleventh Circuit has determined that a confidentiality provision in an arbitration clause was substantively unconscionable. The case involved a putative class action by David Johnson alleging that KeyBank National...more

Carlton Fields

Ninth Circuit Affirms Application Of Arbitration Clause Found In Amazon’s Conditions Of Use

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Applying Washington law, the Ninth Circuit Court of Appeals affirmed a California federal court’s ruling that Amazon’s Conditions of Use (COU) created a valid contract between Amazon and its customers, and there was no...more

Cohen & Gresser LLP

We Have an Arbitration Agreement. Now What?

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The U.S. Supreme Court, in recent years, has provided companies with a powerful tool to avoid class action lawsuits: arbitration. In a series of decisions, the Supreme Court has held that class action waivers in otherwise...more

Payne & Fears

Key California Employment Law Cases: March 2017

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This month’s key California employment law cases involve arbitration and PAGA issues. Arbitration - Farrar v. Direct Commerce, Inc., 9 Cal. App. 5th 1257, 215 Cal. Rptr. 3d 785 (2017) - Summary: Arbitration...more

Carlton Fields

North Carolina Federal Court Holds That Arbitration Clause Requiring Panel To Render A Decision Within 30 Days Is Not...

Carlton Fields on

In July, a federal court in North Carolina held that an arbitration provision which required the arbitration panel to reach a decision within thirty days of their selection was not unconscionable. Arising out of a dispute...more

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