Plaintiff was an employee of Ralph’s Grocery Company who brought a class action suit on behalf of herself and other similarly situated, alleging violations of California law. The employer moved to compel arbitration pursuant to the employment application provision providing arbitration as the exclusive remedy, a provision which all applicants must sign when applying for work. Plaintiffs contended the provision was unconscionable.

Questions:

1. What was the legal issue in this case? What did the Appeals Court decide?

2. What does it mean for a contract to be “unconscionable?” “Procedurally unconscionable?” “Substantively unconscionable?”

3. What was the evidence that this agreement was procedurally unconscionable? That this agreement was substantively unconscionable?

4. Do you agree with this decision? Why or why not? 

5. What would you advise this employer to do in light of this decision? Should it redraft the language of the arbitration agreement to deal with the court’s objections (and, if so, how) or drop the whole thing?