## Facts

- Constance Ramos joined Winston & Strawn LLP’s California office as an “Income Partner” and signed a written partnership agreement containing a mandatory arbitration provision.
- The arbitration provision required arbitration in Chicago, imposed cost-splitting of arbitration fees, mandated broad confidentiality barring discussion with nonparties, and limited arbitrators’ authority to override certain Executive Committee decisions.
- Ramos sued in San Francisco Superior Court alleging discrimination and retaliation under FEHA, wrongful termination, and pay-equity-related claims under California law.
- Winston moved to compel arbitration based on the partnership agreement.
- The trial court severed the Chicago forum and cost-splitting provisions but otherwise compelled arbitration.
- Ramos sought writ relief, arguing the arbitration clause was unconscionable and failed to meet minimum requirements for arbitration of unwaivable statutory claims under Armendariz.

## Issues

1. Whether the partnership agreement’s arbitration provision was enforceable as applied to Ramos’s FEHA and related statutory claims under California unconscionability doctrine and Armendariz minimum safeguards.
2. Whether any unconscionability could be cured by severing discrete terms, or whether the arbitration provision was so permeated by unconscionability that it was unenforceable in full.

## Decision

- The Court of Appeal granted the petition for writ of mandate and reversed the order compelling arbitration.
- The court held the arbitration provision was unenforceable as to Ramos’s FEHA and related claims because multiple terms inhibited pursuit of unwaivable statutory rights.
- The court held the provision was permeated by unconscionability and could not be cured by severance without effectively rewriting the parties’ agreement.
- The court directed the trial court to vacate its order compelling arbitration and to enter a new order denying the motion to compel.

## Legal Principles

- Arbitration agreements covering unwaivable statutory claims must satisfy Armendariz minimum requirements, including neutral decisionmaking, adequate discovery, availability of statutory remedies, and no arbitration-specific costs imposed on the claimant that would not be borne in court.
- Unconscionability requires both procedural unconscionability (oppression or surprise, including adhesion and lack of meaningful choice) and substantive unconscionability (overly harsh or one-sided terms); the two elements operate on a sliding scale.
- Labels such as “partner” do not defeat protections for unwaivable statutory rights; enforceability turns on whether the clause permits effective vindication of those rights.
- Cost-splitting and fee terms that risk deterring statutory claims, restrictions that limit the arbitrator’s remedial authority, and sweeping confidentiality provisions that impair discovery and witness access may be substantively unconscionable in the statutory-rights context.
- Severance is inappropriate when unconscionable terms are central to the arbitration scheme and reflect an employer-favoring design; courts will not cure such defects by rewriting the agreement.

## Conclusion

The court held that a law firm could not compel arbitration of FEHA and related claims under a partnership agreement whose arbitration terms—taken together—created procedural and substantive unconscionability and were so interrelated that severing a few clauses would not cure the defects.


Ramos v. Superior Ct., 28 Cal. App. 5th 1042 (Cal. Ct. App. 2018)