Armendariz v. Foundation Health Psychcare Services, Inc.,

24 Cal. 4th 83 (2000)

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Nature of the Case

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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.