April 2013

An otherwise unconscionable employment arbitration obligation is saved - by the employer's unilateral right to modify the terms

A recent decision by the California Court of Appeals (Second District) sheds needed light on the issue of the enforceability of arbitration clauses in the employment context, and does so in a surprising way. Employment terms that allow an employer to unilaterally modify them are subject to the implied covenant of good faith and fair dealing, the court held - thus saving a one-sided arbitration clause that would otherwise be unconscionable.

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