In Davis v. O'Melveny & Myers, the Ninth Circuit Court of Appeals considered whether an arbitration agreement adopted by a law firm and distributed to its employees was enforceable. When interpreting an arbitration agreement, how the contract doctrine of unconscionability should be applied by state courts, is an essential element of this case. While the Federal Arbitration Act ("FAA") has been interpreted to preempt any state law in conflict with it, state laws governing the necessary foundation to revoke a contract remain unaffected. In considering these principles, state courts have applied the doctrine of unconscionability to arbitration agreements in the employment context with varying degrees of scrutiny. Given the number of arbitration agreements that have been struck down in different jurisdictions, whether this variance in each state's doctrine of unconscionability as applied to arbitration agreements should be permitted is a question that should be resolved to achieve uniformity in employer-employee arbitration law. In Davis v. O'Melveny & Myers, the Ninth Circuit relied on how California courts have found unconscionability in arbitration agreements in order to declare an arbitration agreement unenforceable. Unfortunately, this conclusory analysis of the court only provides more fuel for critics who believe California is imposing special burdens on the enforcement of arbitration agreements deserving of FAA preemption.
Thomas H. Riske,
No Exceptions: How the Legitimate Business Justification for Unconscionability Only Further Demonstrates California Courts' Disdain for Arbitration Agreements,
2008 J. Disp. Resol.
Available at: https://scholarship.law.missouri.edu/jdr/vol2008/iss2/9