Russ Bensing's The Brief Case Blog points out the following case: Post v. Procare Automotive Services Solutions, Cuyahoga App. No. 87646, 2007-Ohio-2106. The case struck down an arbitration clause contained in an employment contract. The employees were suing for age discrimination under Ohio law, and the employer moved to compel arbitration. The trial court denied the motion to compel arbitration.
The Court of Appeals held that the arbitration clause was substantively unconscionable. The arbitration clause said that both parties would pay their own attorney fees, contrary to Ohio law, which provides that a plaintiff may recover attorney fees from the defendant in an employment discrimination case. Additionally, while the employee is limited to binding arbitration, the employer may bypass arbitration for a breach or threatened breach of the non-compete and confidentiality provisions of the employment agreement. However, the trial court failed to have a hearing to determine whether the arbitration clause was unconscionable, so the appellate court remanded for a hearing. The appellate court stated that they had already determined that the arbitration clause was substantively unconscionable, but the trial court must decide whether the arbitration clause is procedurally unconscionable. One must allege and prove a quantum of both substantive and procedural unconscionability in order to have the arbitration clause declared unenforceable.
One judge dissenting, opining that the trial judge should have granted the motion to compel arbitration.
Thanks to Jack Sargent for the tip.
Posted by Sue Altmeyer