Despite having its anti-arbitration rulings reversed several times (and counting) by the United States Supreme Court, the California Supreme Court issued another questionable anti-arbitration decision today in Oto, LLC v. Kho, furthering the Golden State’s ongoing agenda to try to disallow these agreements in the employment setting. In today’s ruling, the Court reversed an order compelling arbitration of an employee’s administrative wage claim that had been filed with the Department of Labor Standards Enforcement (“DLSE”). The Court could not hold that such disputes are categorically exempt from arbitration (because the Court already had its hand slapped on this issue by the U.S. Supreme Court a few years ago), so the Court found another way to invalidate the agreement by holding that it was too procedurally unconscionable to be enforced. In layman’s terms, this basically means that the Court found that the manner in which the agreement was presented to the employee (the print was purportedly small and hard to read and the employee was not given sufficient time to review the agreement or ask questions) was unfair and deprived the employee of meaningful choice in signing the agreement.
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