Baltazar v. Forver 21 : An Analysis by Sacramento Appellate Attorneys

Posted by jackeric on May 25th, 2016

California’s Supreme Court recently found an arbitration agreement, in which all retail store Forever 21 employees are required to sign to be enforceable under the California law. In Baltazar v. Forever 21, the plaintiff, a former employee, challenged Forever 21’s requirement that she sign an agreement requiring arbitration of any disputes with Forever 21 and initially refused to sign the agreement before eventually doing so. The agreement required all disputes with Forever 21 to be redressed through arbitration instead of through the courts; including the disputes related to the alleged discrimination or mistreatment.

The employee filed a lawsuit against Forever 21 and several individuals in Los Angeles Superior Court in year 2011. Her lawsuit claimed she was sexually harassed and also harassed based upon her race and that Forever 21 and various supervisors and managers failed to prevent that discrimination. The defendants filed a motion to compel the court to send the case to arbitration on the basis of the agreement that the Plaintiff had signed when she started work at Forever 21. The plaintiff opposed this motion, claiming  it was unconscionable to force her to arbitration because of the parties’ unequal bargaining power in arbitration; which she argued typically favored businesses over individuals, and because she had to sign the agreement or else not be employed by Forever 21 at all.

Both the trial court and an intermediate appellate court found the agreement unconscionable, based on the employee’s lack of bargaining power and the fact she was either forced to sign the agreement or not work for Forever 21.  Both the trial court and the intermediate appellate court refused to compel her case to arbitration.  California’s Court of Appeals reversed these courts, rejecting the argument the agreement was unconscionable and therefore illegal, because it was one-sided and favored Forever 21 over its employees.

The California Supreme Court agreed, finding the arbitration agreement was legal and not unconscionable simply because it was offered on a ‘take it or leave it’ basis.  It noted the plaintiff knew about the agreement; initially refused to sign it, and that the agreement was consistent with the California law.

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Author’s Bio: The author is an experienced appellate attorney In Sacramento. This article is an analysis of Baltazar v. Forver 21by Sacramento Appellate Attorneys. For more information, visit:- www.kassounilaw.com