Ajamian v. CantorCO2e, L.P.
| Decision Date | 16 February 2012 |
| Docket Number | No. A131025.,A131025. |
| Parties | Lena AJAMIAN, Plaintiff and Respondent, v. CANTORCO2E, L.P., et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Curley, Hessinger & Johnsrud, Palo Alto, Brian L. Johnsrud and Patrick M. Sherman for Defendants and Appellants.
Charles H. Jung, Kassra P. Nassiri and Andrew R. Kislik, San Francisco, for Plaintiff and Respondent.
CantorCO2e, L.P. and Joshua Margolis appeal from an order denying their petition to compel arbitration of respondent's claims under the Federal Arbitration Act. (9 U.S.C. §§ 1–16.) They contend: (1) the arbitration panel, rather than the court, should have decided whether the arbitration provision in respondent's employment agreement was unconscionable; (2) respondent failed to establish that the arbitration provision was unconscionable, and any unconscionable portion of the provision should have been severed to permit the arbitration to proceed; and (3) alternatively, arbitration should have been compelled under the terms of an employee handbook.
We will affirm the order. Although the arbitration provision was broadly worded and indicated that arbitration might be conducted under the rules of an arbitration service that gives arbitrators the power to decide the validity of arbitration agreements, it did not provide clear and unmistakable evidence that the parties intended to delegate authority to the arbitrator, rather than to the court, to decide the threshold issue of whether the arbitration provision itself was unconscionable. The unconscionability issue was therefore for the court to decide. Furthermore, the provision was procedurally unconscionable and substantively unconscionable in more than one respect, such that the court did not abuse its discretion in concluding that the provision could not be saved by severing the offending terms. In addition, appellants failed to establish that arbitration should have been compelled under the employee handbook.
Appellant Joshua Margolis is Chief Executive Officer of appellant CantorCO2e, L.P. (CantorCO2e). In September 2006, CantorCO2e hired respondent Lena Ajamian as its San Francisco office manager.
In September 2006, Ajamian signed an annual acknowledgement and certification form, by which she acknowledged that she had read the Cantor Fitzgerald and eSpeed Policies and Procedures Manual.1 Ajamian avers, however, that she signed this form with the understanding that it referred to an online compliance manual, and she had not seen the policies and procedures manual when she signed the acknowledgement.
The policies and procedures manual is a 65–page document that includes: an employee handbook containing, among many other things, a section entitled “Arbitration Agreement and Policy”; a form by which the employee is to confirm receipt of the handbook and acknowledge that claims and disputes pertaining to its policies are subject to arbitration; an arbitration agreement and policy, containing a line for the employee's signature; and a confidentiality agreement and exhibits. Ajamian did not sign the acknowledgement of her receipt of the employee handbook and agreement to arbitrate. Nor did she sign the arbitration agreement and policy.
The arbitration agreement and policy provides that disputes “shall be submitted to and finally determined before a panel of arbitrators according to the American Arbitration Association's (‘AAA’) National Rules for the Resolution of Employment Disputes then in effect.” It provides further, however, that where the employee and CantorCO2e have entered into a written employment agreement containing an arbitration provision, “the arbitration of any disputes” shall be “as set forth in [the] written employment agreement.” 2
In March 2007, Margolis promoted Ajamian from office manager to broker. In connection with her position as broker, she received and eventually signed an employment agreement containing an arbitration clause.
By June 2007, CantorCO2e provided Ajamian a proposed employment agreement that set forth the terms of her employment as a broker (Employment Agreement). The Employment Agreement raised Ajamian's annual base salary by approximately $20,000, indicated her eligibility to earn a discretionary bonus, and included a fixed term of employment for a minimum of two years.
Section 8 of the Employment Agreement sets forth an arbitration clause. It provides in part: “Any disputes, differences or controversies arising under this Agreement shall be settled and finally determined by arbitration before a panel of three arbitrators in New York, New York, according to the rules of the National Association of Securities Dealers, Inc. (or, at [CantorCO2e's] sole discretion, the American Arbitration Association or any other alternative dispute resolution organization) now in force and hereafter adopted and the laws of the state of New York then in effect.”
The arbitration clause goes on to limit the relief that the parties, particularly the employee, may obtain:
Section 8 of the Employment Agreement further provides:
Notwithstanding the arbitration clause, section 11 of the Employment Agreement anticipates that a court may make certain determinations: “In the event that an arbitration panel or court of competent jurisdiction shall determine that any covenant set forth in this Agreement is impermissibly broad in scope, duration or geographical area, or is in the nature of a penalty, then the parties intend that such panel or court should limit the scope, duration or geographical area of such covenant or reduce the amount of Liquidated Damages to the extent, and only to the extent, necessary to render such covenant reasonable and enforceable, and enforce the covenant as so limited.” (Italics added.)
In addition, section 11 of the Employment Agreement provides that, at least in certain instances, the employee may be liable for CantorCO2e's attorney fees: “Employee agrees that if Employee brings an action, claim or proceeding against [CantorCO2e] ... that relates to or implicates this Agreement, whether as to its validity, efficacy or otherwise, in the event that any of such Parties should prevail in such action, Employee shall pay the reasonable attorney's fees of such Party or Parties.”
Ajamian told Margolis that she wanted to have the Employment Agreement reviewed by a lawyer, and he replied that was not a problem. It appears Ajamian had an attorney review the Employment Agreement on or about June 20, 2007.
Ajamian signed the Employment Agreement about six months later in December 2007. It is undisputed that the Employment Agreement was not the product of negotiation. As to how that came about, however, Ajamian and Margolis have different recollections.
According to Margolis, the Employment Agreement was not presented to Ajamian on a take-it-or-leave-it basis and she was never told it was nonnegotiable. Nonetheless, Ajamian never mentioned the arbitration clause to Margolis or attempted to negotiate it; nor did Ajamian's lawyer contact Margolis to negotiate the terms or send proposed revisions. Furthermore, Margolis never coerced or even required Ajamian to sign the Employment Agreement, although he did inform her that she would need to sign an Employment Agreement if she wanted to be a broker, earn the higher salary and bonus, and receive “greater job security.” Once Ajamian finally signed the Employment Agreement, she appeared happy about its financial terms.3
According to Ajamian, on the other hand, she told Margolis that she “wanted to cross out the arbitration agreement and a number of other sections” of the Employment Agreement and make the Employment Agreement provide for California law instead of New York law. Margolis replied that the company would not consider those changes and she would have to sign the Employment Agreement as-is by December 31, 2007, if she wanted her bonus and salary increase. Ajamian told Margolis that she felt uncomfortable signing the Employment Agreement, but when he said she had to sign it in order to receive her bonus and salary increase, she felt she had no choice and reluctantly signed it. Ajamian did not request any changes after Margolis said she had to sign it, because she understood from Margolis' statements that no changes would be permitted and he would look unfavorably on any such request.
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Ajamian v. CantorCO2e, L.P.
...203 Cal.App.4th 771137 Cal.Rptr.3d 7732012 Daily Journal D.A.R. 2189Lena AJAMIAN, Plaintiff and Respondent,v.CANTORCO2E, L.P., et al., Defendants and Appellants.No. A131025.Court of Appeal, First District, Division 5, California.Feb. 16, [137 Cal.Rptr.3d 777]Curley, Hessinger & Johnsrud, Pa......