Appeals

In Cook v. University of Southern California Cal. App. 5th 312, 340 (2024), reh’g denied (June 13, 2024) the California Court of Appeal, Second Appellate District, held that the arbitration clause in an employment agreement between an employee, Pamela Cook, and an employer, the University of Southern California, was unconscionable. This decision could have an important impact on future attempts to compel arbitration based on arbitration clauses in pre-existing agreements.

In Hernandez v. Sohnen Enterprises Inc., 102 Cal. App. 5th 222 (2024), reh’g denied (June 3, 2024), review filed (June 28, 2024) the California Court of Appeal, Second Appellate Division, made several important findings regarding arbitration agreements. The court held that unless the parties’ arbitration agreement expressly selected California’s arbitration provisions, the Federal Arbitration Act (“FAA”) preempts California Civil Procedure section 1281.97 (part of the California Arbitration Act (“CAA”)). The Court also found that a superior court order allowing a party to withdraw from arbitration per section 1281.97 is immediately appealable as it is the functional equivalent of an order denying arbitration.