California employment case index

A terminated Blue Origin executive opposed arbitration of his FEHA and related claims. The Court of Appeal affirmed the denial of arbitration on unconscionability grounds — expressly declining to reach the federal EFAA — holding the adhesive agreement substantively unconscionable in at least four ways: overbreadth, lack of mutuality, a predispute jury-trial waiver, and a representative/PAGA waiver. Applying Ramirez v. Charter Communications, the court refused to sever, because curing the overbreadth and non-mutuality would require impermissible reformation and would reward one-sided drafting; severance “would not further the interests of justice.”

Charter’s mandatory arbitration agreement directed employees’ claims into arbitration while carving out the claims Charter itself would bring, compressed FEHA filing to the one-year administrative window, and made anyone who unsuccessfully resisted arbitration pay the fees incurred to compel it. The Supreme Court held all three terms substantively unconscionable — but validated the four-deposition discovery cap, disapproving the line of cases that judged discovery limits by a particular plaintiff’s later needs. On remedy, the court rejected clause-counting: severance is a qualitative, totality inquiry under Armendariz, and the refusal to enforce was reversed and remanded for that analysis.

USC required a staff employee to sign an arbitration agreement reaching ‘all claims, whether or not arising out of’ her employment, against USC and a broad web of affiliated persons, surviving her employment indefinitely and revocable only by the university president. The Court of Appeal affirmed the denial of arbitration: the agreement was substantively unconscionable for three independent reasons — overbroad scope, infinite duration, and lack of mutuality — and the trial court reasonably refused to sever, because curing it would require rewriting the plain language and would hand USC a windfall. Unconscionability is judged at the time of contracting, so the employer could not save the agreement by noting the plaintiff’s actual claims were employment-related.

Section 132a does not provide an exclusive remedy; an employee may pursue FEHA disability-discrimination and common-law wrongful-termination claims notwithstanding the availability of a section 132a remedy.

In McDonald v. Santa Fe Trail Transportation Co. (1976) 427 U.S. 273, two white employees were discharged for participating in the theft of antifreeze from a shipment in their employer's care, while a Black employee charged with the same misconduct was retained. The Supreme Court held — unanimously as to Title VII, and seven-to-two as to 42 U.S.C. § 1981 — that both statutes protect against racial discrimination directed at any race, including white persons. An employer “may justifiably refuse to rehire one who was engaged in unlawful, disruptive acts against it, but only if this criterion is applied alike to members of all races.” The judgment dismissing the complaint was reversed and the case remanded.