In Sparks v. Vista Del Mar Child and Family Services, ___ Cal.App.4th ___ (Jul. 30, 2012), the Court of Appeal (Second Appellate District, Division Five) affirmed an order denying arbitration of wrongful termination claims where the arbitration clause was buried in a lengthy employee handbook and was otherwise unconscionable.
While Sparks is not a class action, this excerpt is of interest:
The arbitration clause in question provides for the application of the Federal Arbitration Act. Although that Act preempts state-law rules that stand as an obstacle to the accomplishment of the Act’s objective, i.e. rules that require classwide arbitration, (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __, 131 S.Ct. 1740, 1748 (Concepcion)) the issue of whether the parties agreed to arbitration is ordinarily decided under state law. (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944; see also Cheng-Canindin v. Renaissance Hotel Associates, supra, 50 Cal.App.4th at p. 683 [“The question of whether the parties agreed to arbitrate is answered by applying state contract law even when it is alleged that the agreement is covered by the FAA [Federal Arbitration Act, 9 U.S.C. § 1 et seq.]. [Citations.]”].) Moreover, the United States Supreme Court in Concepcion did not eliminate state law unconscionability as a defense to the enforcement of arbitration agreements subject to the Federal Arbitration Act. (Concepcion, supra, 563 U.S. __, 131 S.Ct. at p. 1746; Samaniego v. Empire Today LLC (2012) 205 Cal.App.4th 1138, 1150; Kanbar v. O’Melveny & Myers (N.D. Cal. July 21, 2011, C-11-089211) __ F.Supp.2d__ [2011 WL 2940690 *6]; see also Rent-A-Center, West, Inc. v. Jackson (2010) __ U.S. __, 130 S.Ct. 2772, 2779 [arbitrator could decide unconscionability issue].)
Slip op. at 7 (emphasis added).