Court of Appeal addresses severability of unconscionable provisions in arbitration agreements: Ramirez v. Charter Communications, Inc.

In Ramirez v. Charter Communications, Inc.,           Cal.App.5th           (Feb. 26, 2025), the Court of Appeal (Second Appellate District, Division Four) declined on remand to sever unconscionable portions of an arbitration agreement, holding that doing so “would not further the interests of justice.”  

Read more

Plaintiff sued for various FEHA violations after being terminated. The trial court found the parties’ arbitration agreement procedurally and substantively unconscionable and refused to enforce it. Defendant appealed, and the Court of Appeal affirmed. On review, the California Supreme Court reversed in part, remanding to the Court of Appeal to determine whether to sever the objectionable portions or refuse to enforce the entire agreement. 

Following the Supreme Court’s guidance (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478), the Court of Appeal affirmed the trial court’s refusal to enforce the agreement. It held that severing the unconscionable provisions would impermissibly rewrite the agreement and impose terms not agreed to by the parties. The court also found that the agreement’s multiple defects indicated an intent to secure an unfair advantage for the employer, making severance an “inappropriate remedy”. Allowing severance in such cases, the court reasoned, could encourage employers to draft one-sided agreements.

Full opinion

Scroll to Top