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Arbitration Updates

  • April 02, 2024
  • Blog

In comparison to trials, arbitration can expedite dispute resolution, help avoid class-action lawsuits, and circumvent the potentially costly and time-consuming litigation process. Therefore, it is imperative that businesses ensure arbitration clauses are enforceable.

On December 21, 2023, in Hasty v. American Automobile Assn. of Northern Cal., Nev. & Utah, a California appellate court in the 3rd district upheld a trial court ruling that an arbitration agreement was unenforceable on the grounds that it was both procedurally and substantively unconscionable. The main factors in determining procedural unconscionability included the plaintiff’s experience of the arbitration agreement on a small smartphone screen versus a desktop monitor or paper printout, and the ease with which the plaintiff could electronically click “I agree” without opening to the actual arbitration agreement.

Generally, arbitration agreements that are excessively one-sided are deemed substantively unconscionable. In Hasty, the appellate court agreed that the arbitration agreement was substantively unconscionable because:

  1. The confidentiality provision was overly broad;
  2. The plaintiff’s waiver of the right to bring a claim under California’s Private Attorneys General Act (PAGA) was not valid;
  3. The plaintiff’s waiver of any remedy or relief from a government agency was overly harsh and shocked the conscience; and
  4. The link to the arbitration agreement was broken.

The decision emphasizes the heightened scrutiny arbitration agreements must survive and highlights the need to ensure that such agreements are procedurally and substantively conscionable. If not, a court may opt not to enforce an agreement despite the presence of a severance provision. Considering this stance, businesses should review their arbitration agreements and the procedure with which they send and obtain electronic acknowledgements.

***Keep in mind, the above is simply a brief overview of a recent arbitration case. There are other regulations and elements that can factor into an unconscionability test. If you have any questions or would like to discuss further, please contact our office***

  • April 16, 2024
  • Blog

Generational Differences in the Workplace

The workspace can be a very diverse place, featuring colleagues of various ages, races, ethnicities and more. In Western culture, there are 4 generations commonly present in our workforce right now, from oldest to youngest: baby boomers, Generation X, millennials, and Generation Z. At POTENTE, we can proudly say that...

  • February 13, 2024
  • Blog

New Rule on Independent Contractor Classification Blog Post (Feb 2024)

The United States Department of Labor (DOL) announced that beginning March 11, 2024, a new final rule will address independent contractor classifications. This new rule provides a guideline as to whether a worker is classified as an employee or an independent contractor under the Fair Labor Standards Act. The DOL...