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Packin v. Astra USA1/29/2002
ney's fees.
After Packin's complaint was filed, Astra offered to modify the arbitration agreement so as to (1) remove the limitation on damages ("Mr. Packin will be entitled to recover any relief permissible under applicable law"); (2) allow the arbitrator's decision to be submitted to the Equal Employment Opportunity Commission; and (3) pay the full cost of the arbitration, excluding attorney's fees. Packin declined the offer, and Astra filed its motion to stay the litigation.
DISCUSSION
Astra first contends whether the arbitration agreement is unconscionable is a question for the arbitrator, not the trial court. But the trial court must determine whether an agreement to arbitrate exists before compelling arbitration. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1527.) Because an agreement to arbitrate can be invalidated "upon such grounds as exist for the revocation of any contract" (Code Civ. Proc., § 1281), and because unconscionability is a defense to the enforcement of contracts in general (Civ. Code, § 1670.5), it is a question for the trial court.
Astra next contends its arbitration agreement is not unconscionable. We disagree. The FEHA establishes statutory rights designed "to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgement on account of race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status, sex, age, or sexual orientation." (Gov. Code, § 12920.) This public policy against employment discrimination "inures to the benefit of the public at large rather than to a particular employer or employee"; accordingly, these rights cannot be waived. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 100-101.)
In Armendariz, the Supreme Court formulated minimum requirements for "the validity of a mandatory employment arbitration agreement, i.e., an agreement by an employee to arbitrate wrongful termination or employment discrimination claims rather than filing suit in court, which an employer imposes on a prospective or current employee as a condition of employment." (Armendariz, supra, 24 Cal.4th at p. 90.) Astra argues the Armendariz rules do not apply here because arbitration was not a condition of Packin's continued employment; he could have refused to sign and forfeited future allocations to the profit sharing plan. We fail to see the distinction. Employee benefits are an important part of the compensation package, and the loss of profit sharing allocations would be, in effect, a reduction in compensation. Forcing an employee to accept a reduction in compensation in exchange for the right to a judicial forum is as offensive as imposing arbitration as a condition of employment. Accordingly, we assess the validity of Astra's arbitration agreement under the principles of Armendariz.
Armendariz held while "an arbitration agreement cannot be made to serve as a vehicle for the waiver of statutory rights created by the FEHA," it will be enforceable if it meets certain minimum requirements which permit an employee to vindicate his or her statutory rights. "Such an arbitration agreement is lawful if it `(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators' fees or expenses as a condition of access to the arbitration forum.'" (Armendariz., supra, 24 Cal.4th at p. 102.)
The agreement here fails to meet the minimum requiremen
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