Both California and federal law favor the enforcement of valid arbitration agreements. But, courts will not enforce an arbitration agreement that is unconscionable. Unconscionability refers to absence of meaningful choice on the part of one of the parties together with the contract terms which are unreasonably favorable to the other party. ( Baltazar v Forever 21, Inc. (2016)).
To strike down an arbitration agreement as unconscionable, so that you are able to proceed with a lawsuit in court, evidence of both, procedural and substantive unconscionability must be shown. In the employment context, showing procedural unconscionability is usually not hard. As long as the arbitration agreement is an essential part of a “take it or leave it” employment condition, i.e. where the employer says that you don’t get the job unless you sign that agreement, it will be deemed procedurally unconscionable. (Martinez v Master Protection Corp (2004)).
Substantive unconscionability exists when the terms of the agreement are so one-sided as to “shock the conscience”. (Pinnacle Museum Tower Assn. v Pinnacle Market Development (2012)). This element is typically found in the employment context when the arbitration agreement is one sided in favor of the employer without sufficient justification. (Serafin v. Balco Properties, Ltd., LLC (2015)). Some of the factors that may render arbitration agreement substantivaly unconscionable are (1) shorter statute of limitations than would have been applicable if the same claims were brought in court (Pineda v Bank of America, N.A. (2010)); (2) limitations on discovery that would prevent a party from adequately arbitrating her claims, including significant limitations on written discovery, depositions, and witnesses (Davis v Kozak (2020)).
Depending upon the amount of issues affecting unconscionability found in the arbitration agreement, and evidence of bad faith in drafting that agreement, a court can modify or reject the agreement in its entirety. (Wherry v Award, Inc. (2011)).
Carefully evaluate your arbitration agreement before your decide to challenge it in court to determine that you have a good chance or prevailing, and being allowed to bring your claims against your employer in court.