Carbajal v. CWPSC, Inc.
Annotate this CaseDefendant-appellant CWPSC, Inc. (CW Painting) appealed a trial court order denying its motion to compel its former employee, plaintiff-respondent Martha Carbajal, to arbitrate her wage and hour claims under the arbitration provision in her employment agreement. The trial court denied the motion because it found the arbitration provision was both procedurally and substantively unconscionable. After review, the Court of Appeal found: (1) the arbitration provision was procedurally unconscionable because it was part of an adhesion contract CW Painting imposed on Carbajal as a term of her employment; (2) the arbitration provision was substantively unconscionable because it allowed CW Painting to obtain injunctive relief in court while requiring Carbajal to seek relief through arbitration, it waives the statutory requirement that CW Painting post a bond or undertaking to obtain injunctive relief, and it effectively waives Carbajal’s statutory right to recover her attorney fees if she prevailed on her Labor Code claims; and (3) pursuant to the Federal Arbitration Act, the party asserting the FAA bore the burden to show it applied by presenting evidence establishing the contract with the arbitration provision has a substantial relationship to interstate commerce, and CW Painting failed to timely present such evidence. Accordingly, the Court affirmed the trial court’s order.
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