In 2000, the California Supreme Court used its decision in Armendariz v. Foundation Health Psychcare Services to articulate minimum requirements for employment arbitration agreements. Last year, in AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court reiterated that the Federal Arbitration Act preempts state laws that “stand as an obstacle to the accomplishment and execution of the full purpose and objectives of [the FAA].”
From my admittedly biased perspective, a number of the Armendariz requirements run afoul of Concepcion. Where, for example, did the requirement of “a modicum of bilaterality” come from? And if federal law preempts limitations on arbitration, how can a state court dictate what level of discovery is required and how much detail must be included in a written decision?
More recently, one California appellate case struck down an arbitration agreement for not providing the employee with a copy of the American Arbitration Association rules. The defendant in that case – Mayers v. Volt Management – has petitioned for review. Last week, the California Supreme Court granted review in Wisdom v. AccentCare, which found an arbitration agreement substantively unconscionable because the acknowledgment said "I agree . . . " instead of "we agree . . . " and that evidenced a lack of mutuality.
There is no doubt that there are judges at all levels of our state court system who are hostile to the idea of mandatory workplace arbitration. The frequency with which they announce new requirements makes it impossible for employers to keep up. If the California Supreme Court doesn’t rein them in, expect the U.S. Supreme Court to intervene. Until then, add this to the areas of California employment law that are rife with uncertainty.