ARMENDARIZ V. FOUNDATION HEALTH PSYCHCARE SERVICES, INC.
24 Cal. 4th 83 (2000)
NATURE OF THE CASE: Armendariz (P) appealed a California Court of Appeals decision
permitting Foundation's (D) petition to compel arbitration and enforcing an arbitration
agreement minus one provision found unconscionable, where P sued for wrongful termination
and D petitioned to compel arbitration because P signed a mandatory arbitration agreement
before beginning employment.
FACTS: P was hired by Foundation (D) under an employment contract that contained an
arbitration clause for any wrongful terminations. Eventually P was terminated about a year
later. During their year of employment, they claim that their supervisors and coworkers
engaged in sexually based harassment and discrimination. The employees alleged that they
were 'terminated . . . because of their perceived and/or actual sexual orientation
(heterosexual).' P then sued for violations of FEHA for wrongful termination under a claim
of sexual harassment. D sought to compel arbitration. P argued that she could not be
compelled to arbitrate an anti-discrimination claim under FEHA, that several provisions of
the arbitration agreement were unconscionable, and those terms rendered the entire
arbitration agreement unenforceable. The trial court agreed with P and given the overall
unfairness of the agreement invalidated it. The Court of Appeal reversed in that only the
damages provision of the agreement was unconscionable but the rest of the agreement should
be enforced. D appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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