Roman v. Superior Court (Flo-Kem, Inc.)
Filed April 13, 2009, Second District, Div. Seven
Cite as 2009 SOS 2088

Arbitration Agreement not Unconscionable though Limited

Gabriela Roman (Roman) was a receptionist at Flo-Kem, Inc. (Flo-Kem). She was later on promoted to the accounts receivable department and remained therein until her termination.

When Roman was terminated, she filed discrimination and wrongful termination claims against Flo-Kem under the Fair Employment and Housing Act (FEHA).

Roman’s application for employment contained arbitration clause wherein she agreed to submit to binding arbitration all disputes arising from such application; that disputes not resolved by informal internal resolution should be submitted to binding arbitration; and that the arbitration should be conducted by the American Arbitration Association.

Flo-Kem filed a petition to compel arbitration based on the above agreement. The trial court ordered for arbitration.

Consequently, Roman filed a petition for writ of mandate challenging such order. She contended that the arbitration clause is unconscionable hence, unenforceable. However, the trial court denied Roman’s petition.

On appeal, the California Court of Appeal ruled that the arbitration agreement was not unconscionable on the following grounds:

1. Procedural agreement was contained on the last page of a seven-page employment application and not on the dispositive portion.
   
   The arbitration agreement was not buried in a single spaced document. Whatever unfairness it brought was limited and common to a contract of adhesion such as an application for employment.
   
   Further, there were no indications that the agreement was only limited to Roman’s claim against Flo-Kem. Roman acceded to the fact that, if hired, all disputes and claims that might occur out of employment with the company would create a mutual agreement to arbitrate all claims arising out of the applicant’s employment.


2. The arbitration clause was bilateral
   
   The case of Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1252-1253 (Higgins) could not be applied in this case. In Higgins’ case, the arbitration clause was “buried” in a lengthy single spaced form document.
   
   However, in the instant case, the arbitration provision which was separately initialed by Roman was contained in a short agreement and not “buried” in a 24 page document with multiple attachments. Moreover, the agreement was written in a clear and understandable language.
   
   The fact that the agreement contained words “I agree” did not make it unilateral.


3. The arbitration clause did not limit Roman’s right under the FEHA or impose undue limitation on discovery
   
   The clause did not prohibit Roman from filing administrative claims with the DFEH or other state agency. It did not prevent any state agency from carrying out its statutory functions by the clause to which it was not a party.

With the above considerations, the appeal court ruled that the trial court properly denied the petition for mandate.