No, the whole agreement is not thrown out. The court decided that while the contract was 'take-it-or-leave-it,' it wasn't presented unfairly because Zuver had two weeks to read it and the terms were clear. However, the court found two rules in the contract were very unfair ('substantively unconscionable'): 1) The secrecy rule, because it helps the company hide patterns of bad behavior from other employees. 2) The rule limiting damages, because it only applied to the employee, not the company. Because the contract had a 'severability clause' (the rule saying the good parts survive if bad parts are removed), the court just cut out the two unfair rules and ordered the case to go to arbitration under the remaining fair rules.

No, the agreement is not thrown out. I agree with the final decision to send the case to arbitration, but I don't think the rule about limiting 'punishment' money was actually unfair. In my view, just because a rule helps one side more than the other doesn't make it legally 'shocking' or 'unconscionable.' However, since the majority just cut out that rule, I agree with the end result.

The arbitration agreement is mostly okay, but the confidentiality part and the part limiting Zuver's remedies are extremely unfair. The agreement says unfair parts can be taken out, so the court will remove those parts but still make Zuver arbitrate. To decide if an agreement is unfair in how it was made, the court looks at whether the person had a real choice and how the contract was presented, like if important parts were hidden. Just because it's a take-it-or-leave-it contract doesn't always make it unfair, but not having a real choice is important. To decide if a part is unfair in substance, the court looks at whether it is overly harsh or one-sided, not just at whether both sides have the exact same deal. Here, the confidentiality part is unfair because it makes it harder for Zuver to prove discrimination happened before or use past findings, and makes her doubt the fairness of arbitration. The remedies part is also unfair because it stops Zuver from getting certain kinds of damages in her claims but lets Airtouch get those damages in the kind of claim it would probably bring against her. This one-sided block on some damages is way too favorable for the employer.

I mostly agree with the court’s decision to cut out the unfair parts of the contract because keeping the arbitration process intact is important. But I don’t think that stopping the employee from getting extra punishment money (punitive damages) is automatically wrong, because contracts can let one side have a different rule if both agree to it. I disagree with the majority on this point because I believe that even though this rule seems a bit one-sided, it isn’t so harsh that the whole agreement should be thrown out.

Procedural unconscionability is: "the lack of meaningful choice, considering all the circumstances surrounding the transaction including [t] he manner in which the contract was entered, whether each party had a reasonable opportunity to understand the terms of the contract, and whether the important terms [were] hidden in a maze of fine print

—noting that "when parties have agreed to a severability clause in an arbitration agreement, courts often strike the offending unconscionable provisions to preserve the contract's essential term of arbitration," and doing so when "faced with only two unconscionable provisions

T] he fact that an agreement is an adhesion contract does not necessarily render it procedurally unconscionable

"As written, the provision hampers an employee's ability to prove a pattern of discrimination or to take advantage of findings in past arbitrations. Moreover, keeping past findings secret undermines an employee's confidence in the fairness and honesty of the arbitration process, and thus potentially discourages that employee from pursuing a valid discrimination claim

" `The party opposing arbitration bears the burden of showing that the agreement is not enforceable.'"Id

Whether or not a contract is one of adhesion, the key inquiry for finding procedural unconscionability is whether the party challenging the contract lacked meaningful choice.

—holding unilateral remedies limitation provision in arbitration agreement was substantively unconscionable because the provision "blatantly and excessively favors the employer in that it allows the employer alone access to a significant legal recourse

Whether a contract is an adhesion contract turns on (1) whether the contract is a standard form printed contract,(2) whether it was prepared by one party and submitted to the other on a "take it or leave it" basis, and (3) whether there was no true equality of bargaining power between the parties.

"In short, substantive unconscionability does not concern `whether the parties have mirror obligations under the agreement, but rather whether the effect of the provision is so "one-sided" as to render it patently "overly harsh."'"

"[T] hese three factors [should] not be applied mechanically without regard to whether in truth a meaningful choice existed.'"

No, the arbitration agreement is not unenforceable as a whole. While the confidentiality and remedies limitation provisions are substantively unconscionable, they can be severed from the agreement, and the remainder, including the core agreement to arbitrate, is enforceable. The agreement is not procedurally unconscionable because, although it was an adhesion contract, Zuver had 15 days to review it, its terms were clear and not hidden in fine print, and a lack of bargaining power alone is insufficient to establish unconscionability. However, two provisions are substantively unconscionable: 1) the confidentiality provision, because it systematically favors the employer by preventing employees from discovering patterns of discrimination, and 2) the remedies limitation provision, because it is one-sided, barring the employee from seeking punitive damages for common law claims while the employer would likely be able to seek such damages for its claims. Pursuant to the agreement's severability clause, these two offending provisions are stricken, and the rest of the agreement is enforced.

No, the arbitration agreement is not unenforceable. While I concur with the majority's ultimate decision to compel arbitration, I dissent from its conclusion that the remedies limitation provision is substantively unconscionable. The majority's reasoning is effectively a disguised and improper application of the 'lack of mutuality' doctrine, which is not a basis for invalidating contracts in Washington. A one-sided remedies provision is not so 'overly harsh' or 'shocking to the conscience' as to be deemed unconscionable. The majority's analysis improperly erodes the enforceability of employment arbitration agreements contrary to the policy of the Federal Arbitration Act.

The arbitration agreement is enforceable, except for the provisions pertaining to confidentiality and limitation of remedies, which are substantively unconscionable. The agreement's severability clause allows these provisions to be severed, preserving the remainder of the agreement. Procedural unconscionability is assessed by the lack of meaningful choice and the manner in which the contract was entered, including the clarity of important terms. The fact that an agreement is an adhesion contract does not necessarily make it procedurally unconscionable, but the lack of meaningful choice is key. Substantive unconscionability is determined by whether the effect of a provision is overly harsh or one-sided, not necessarily by the equality of obligations. Here, the confidentiality provision is substantively unconscionable because it hampers an employee's ability to prove a pattern of discrimination or take advantage of findings in past arbitrations, and undermines the employee's confidence in the fairness of the arbitration process. The remedies limitation provision is also substantively unconscionable because it bars Zuver from collecting punitive damages on her common law claims while allowing Airtouch to claim such damages in the only type of suit it would likely bring against her. This unilateral bar on types of damages blatantly and excessively favors the employer.

I join in part with the majority’s decision to sever the unconscionable provisions from the arbitration agreement because preserving the core term of arbitration is paramount. However, I dissent from the majority’s finding that the remedies limitation provision is substantively unconscionable because a lack of mutual obligation does not, in itself, render a contractual term void. I contend that the one-sided limitation on recovery of punitive damages for the employee does not shock the conscience since, under established Washington law and principles of contract autonomy, parties are free to agree to terms that may favor one side as long as there is adequate consideration. My opinion diverges from the majority because I believe this provision, while arguably imbalanced, should not invalidate the agreement as a whole since its impact on the overall dispute resolution process is limited.

Zuver v. Airtouch Communications, Inc.

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