California Appellate Court Strikes Arbitration Agreement in Employee Handbook as Unconscionable

Reversing an order compelling arbitration, the California Court of Appeal has held that an arbitration agreement in an employee handbook was unconscionable because it was a contract of adhesion, failed to give adequate notice of the arbitration rules that will apply, and lacked mutuality. Thus, the Court held that the agreement was unenforceable and ordered the trial court to vacate its order compelling arbitration.