The court held that a number of the provisions in the subject arbitration agreements were unconscionable, including a delegation clause providing that disputes involving the arbitration agreement be decided in arbitration. The court found this clause to be, not only ambiguous in light of a conflicting class action court jurisdiction clause, but unconscionable as a contract of adhesion that, when combined with a fee splitting provision, unfairly required “the payment of hefty fees simply to arbitrate arbitrability.” The court further found unconscionable the clauses requiring the drivers to waive class claims under the Private Attorney General Act (PAGA), under Ninth Circuit precedent and California state case law. Because the court found that the arbitration agreement was “permeated with unconscionability,” it determined that it would not sever particular clauses, but would reject the arbitration agreement entirely. As a result, the court did not consider plaintiffs’ alternative argument that the arbitration agreement was unenforceable because it violated the drivers’ rights under the National Labor Relations Act to file a class claim (as held by the NLRB in D.R. Horton). The court did appear to suggest, however, that such an argument would likely fail under the policies of the FAA as set forth by the U.S. Supreme Court in Concepcion. O’Connor v. Uber Technologies, Inc., Case No. 13-cv-03826-EMC (USDC N.D. Cal. Dec. 10, 2015).
This post written by Joshua S. Wirth, a law clerk at Carlton Fields Jorden Burt in Washington, DC.
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