California Supreme Court Clarifies that the Issue of Severing Allegedly Unconscionable Clauses from Employment Arbitration Agreement is a Qualitative Rather Than Quantitative One and the Arbitration Agreement Should Be Enforced if Possible Rather Than Abandoned
“[T]he decision whether to sever unconscionable provisions and enforce the balance is a qualitative one, based on the totality of the circumstances. The court cannot refuse to enforce an agreement simply by finding that two or more collateral provisions are unconscionable as written and eschewing any further inquiry.”
-Justice Carol A. Corrigan
On July 15, 2024, the California Supreme Court issued a decision in Charter Communications v. Ramirez, Case No. S273802, making clear that the issue of severance of allegedly unconscionable clauses in an arbitration agreement is a qualitative one rather than a quantitative one – and that an arbitration clause should be saved rather than invalidated if it can be.
The Court’s decision aligns with the argument Coblentz submitted in its amicus curiae brief filed on behalf of Employers Group. Employment partner Fred Alvarez prepared the amicus curiae brief and was recently quoted in the Daily Journal, noting, “If you can show the provision is collateral to the agreement, and it’s severable, then you can enforce the arbitration agreement rather than toss the whole agreement.” Fred was also quoted in Law360.
