WSRCA Contractors Counsel: Legal Talk - Arbitration Agreement 

Featuring Legal Advisor: Kenneth S. Grossbart, Law Offices of Abdulaziz, Grossbart & Rudman 

WSRCA has written before regarding the concept of arbitration vs. litigation. Arbitrating disputes is very common and arbitration clauses are found in all types of different situations. Arbitration clauses are very common in construction-related contracts as well as employment-related contracts. Arbitration is favored by the courts and if there is an arbitration clause contained in a contract, the court more often than not will enforce the arbitration clause and require that the parties arbitrate their disputes as oppose to litigating their disputes in the court system.  

A recent California Appellate[1] case addresses the validity of an arbitration clause that was contained in an employment agreement. Maya Baxter was employed by AssetMark Investment Services, Inc. Genworth North acquired AssetMark. Genworth required that Ms. Baxter sign an arbitration agreement. The arbitration agreement required that all employment disputes be resolved according to Genworth Alternative Dispute Resolution guidelines. At a later date, Genworth eliminated Ms. Baxter job position and as a result terminated her employment. Ms. Baxter sued Genworth for wrongful termination alleging Genworth fired her because of her race. Genworth filed a motion to compel arbitration pursuant to the arbitration clause contained within the employment contract however the court denied Genworth’s motion on the grounds that the arbitration agreement was procedurally and substantively unconscionable. Click here to continue reading.  

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[1] The holding of this case would no doubt be the same in other States.