When arbitration agreements go too far: Lessons from Cook and Ramirez
Recent California decisions underscore that while courts favor arbitration, overly aggressive employer-drafted agreements risk unenforceability when they compromise fairness.
Both federal and California law embody a strong policy favoring the enforcement of arbitration agreements. The Federal Arbitration Act reflects a congressional determination that arbitration provides a speedy, economical and efficient forum for dispute resolution. California courts have long echoed this preference, recognizing arbitration as a valuable alternative to the congestion and expense of traditional litigation. Yet as the recent decisions in Cook v. University of Southern California (2024) 102 Cal. App.5th 312 and Ramirez v. Charter Communications, Inc. (2024) 16 Cal. 5th 478 demonstrate, an employer’s attempt to maximize the reach of an arbitration agreement can backfire when the drafting overreaches fundamental fairness. Plaintiffs’ counsel should, of course, be aware of these concerns in crafting any opposition to a motion to compel arbitration.
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Both federal and California law embody a strong policy favoring the enforcement of arbitration agreements. The Federal Arbitration Act reflects a congressional determination that arbitration provides a speedy, economical and efficient forum for dispute resolution. California courts have long echoed this preference, recognizing arbitration as a valuable alternative to the congestion and expense of traditional litigation. Yet as the recent decisions in Cook v. University of Southern California (2024) 102 Cal. App.5th 312 and Ramirez v. Charter Communications, Inc. (2024) 16 Cal. 5th 478 demonstrate, an employer’s attempt to maximize the reach of an arbitration agreement can backfire when the drafting overreaches fundamental fairness. Plaintiffs’ counsel should, of course, be aware of these concerns in crafting any opposition to a motion to compel arbitration.
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