Ramirez v. Charter Communications, Inc.
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Charter created a program for resolving and ultimately arbitrating employment-related disputes. Individuals who received an offer from Charter were required to complete a web-based onboarding process as a condition of employment; they were prompted to review and accept various policies and agreements, including the arbitration agreement and the program guidelines. After agreeing to submit all employment-related disputes with Charter to arbitration, Ramirez was hired in July 2019. In May 2020, Charter terminated Ramirez. Ramirez filed suit, alleging multiple claims under California’s Fair Employment and Housing Act (FEHA) and wrongful discharge. Charter moved to compel arbitration and sought attorney fees in connection with its motion pursuant to the arbitration agreement.
The court denied Charter’s motion to compel arbitration, finding that the requirement was substantively unconscionable because it shortened the statute of limitations for FEHA claims, failed to restrict attorney fee recovery to only frivolous or bad faith FEHA claims (contrary to FEHA), and impermissibly provided for an interim fee award for a party successfully compelling arbitration. The court of appeal affirmed. The arbitration agreement was a contract of adhesion, which establishes a minimal degree of procedural unconscionability, and the agreement contained a high degree of substantive unconscionability. The arbitration agreement is permeated by unconscionability and cannot be enforced.
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