Severability Saved The Day!
In Conyer v. Hula Media Services, LLC, Case No. B296738 (2d Dist., Div. 8 Aug. 26, 2020) (published), the appellate court reversed a trial judge’s decision denying arbitration to an employer even though employee acknowledged receiving a handbook with the arbitration clause but argued that there was an employer duty to highlight the clause. However, the arbitration clause did have an infirm attorney’s fees/costs provision, requiring each party to pay a pro rata share of the arbitrator’s fees and costs. For FEHA claims, the employee does not have to pay fees and costs greater than the amount to file a claim under Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83, 112 (2000). The arbitration clause also provided that the arbitrator shall award fees to the prevailing party carte blanche, despite the fact that a prevailing defendant in a FEHA case can only recover fees if the plaintiff’s action was frivolous in nature. (Chavez v. City of Los Angeles, 47 Cal.4th 970, 985 (2010).) However, the severability doctrine came to the rescue—the agreement was not so permeated with unconscionability such that the fees provisions could be severed out so as to leave an enforceable agreement. That is how the appellate court ruled, reversing the denial of the motion to compel arbitration.