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Employment Contract and Unconscionability

Substantive Unconscionability
Whether a contract is substantively unconscionable is a question of law determined as of the time the contract was made, as opposed to the time when the contract is enforced.
B. Substantive Unconscionability of the 1998 DRRP
In Mantor, Ingle, and Adams, we held that Circuit City’s arbitration agreement is substantively unconscionable under California law and rejected contract provisions: (1) forcing employees to arbitrate claims against Circuit City, but not requiring Circuit City to arbitrate claims against employees…; (2) limiting remedies…; (3) splitting costs and fees…; (4) imposing a one-year statute of limitations…; (5) prohibiting class actions…; (6) regarding the filing fee and waiver of the fee…; and (7) giving Circuit City the unilateral right to terminate or modify the agreement….
California applies virtually the same definition of substantive unconscionability as Washington…. Thus, we conclude that Mantor, Ingle, and Adams are persuasive authority that the arbitration agreement is substantively unconscionable under Washington law. And, in fact, the Washington Supreme Court recently cited Ingle… and Adams… with approval, in holding that a 180-day limitations provision in an employment arbitration agreement was substantively unconscionable….
Moreover, the United States Supreme Court has explained that “by agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.”… Gilmer requires arbitration agreements to embody “basic procedural and remedial protections so that claimants can effectively pursue their statutory rights.”…

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