An employee sued her employer for sexual harassment and other claims. The employer sought to compel arbitration pursuant to the provisions of its employment handbook. The employee contended (and the trial court agreed) that because the handbook permitted the employer to change its provisions at the employer's sole discretion, the arbitration policy was illusory and therefore unconscionable.
The court of appeals found the fact that the provisions of a contract can be modified does not alone render a contract unconscionable because the authority to change the provisions of a contract is limited by the covenant of good faith and fair dealing. Moreover, the court found that unconscionability requires a finding that a contract is both procedurally and substantively unconscionable. Here, even if the employment handbook was substantively unconscionable, there were no facts justifying a finding that it was also procedurally unconscionable (i.e. no surprise or oppression). Serpa v. California Surety Investigations Inc. 2013 DJDAR 5124.
