Plaintiff Poublon filed suit in state court against her employer, C.H. Robinson. Robinson removed to federal court. Likely anticipating a motion to compel arbitration, Poublon filed a First Amended Complaint, which added a claim on under the Private Attorneys General Act (PAGA), which are non-arbitrable under settled law because a PAGA claim is filed on behalf of the State of California.
The Ninth Circuit reversed the district court’s finding of unconscionability. First, the fact that the arbitration rules were not attached to the agreement and were simply incorporated by reference may, at most, gave rise to a “greater degree of procedural unconscionability” under Baltazar, 62 Cal. 4th at 1246. And the 9th Circuit further held that “parties may validly incorporate by reference into their contract the terms of another document” provided certain conditions are met.
Interestingly, the Court also disputed that language requiring Plaintiff’s signature “In consideration for Your continued employment” to not indicate that signing was a condition of employment, as it was merely “boilerplate.” This is a somewhat difficult holding, as contracts are supposed to mean what they say, boilerplate or not. Yet the Ninth Circuit did not find oppression here. Moreover, the existence of representative claim waivers, a carve-out allowing the company (but not Plaintiff) to go to court to seek injunctive relief, and a venue provision setting arbitration in Minnesota were not enough to tip the balance to substantive unconscionability. Those that were one-sided could be severed, preserving the remainder.
It seems to us that were this case decided by the California Court of Appeal, it would likely have been decided in favor of the employee given the number of arguably unconscionable or one-sided provisions. The Ninth Circuit, however, generally displays a greater degree of deference to the preemptive quality of the Federal Arbitration Act. This is likely a case that will be cited to by employer defendants for some time, particularly in federal court, while plaintiffs will look to distinguish it with inconsistent state appellate authority.
One thing is certain: The arbitration morass is unlikely to leave us anytime soon.
Poublon v. C.H. Robinson Company (9th Cir. Feb. 3, 2017)
2017 S.O.S. 15-55143, http://sos.metnews.com/sos.cgi?0217//15-55143