A California appellate court has upheld a lower court's decision to deny a company's motion to compel arbitration in a class action lawsuit filed by a former employee. Annalycia Jenkins, the plaintiff, initiated the class action against Dermatology Management, LLC, her former employer, in October 2022. The case was filed in San Luis Obispo County Superior Court under case number 22CV-0564. Jenkins accused the company of unfair competition and sought relief under California's Business and Professions Code.
The legal battle centers around an arbitration agreement that Jenkins signed on her first day of work as a medical assistant in May 2019. Dermatology Management had pre-signed this agreement four months prior. When Jenkins resigned in June 2020, she later pursued legal action claiming unfair business practices. The defendant company sought to enforce arbitration based on the agreement, arguing that it required all disputes to be settled out of court.
However, both the trial court and the appellate court found the arbitration agreement to be procedurally and substantively unconscionable. Procedural unconscionability was identified due to the nature of the contract being adhesive—offered on a take-it-or-leave-it basis without room for negotiation—and signed by the employer before Jenkins even started her job. Substantive unconscionability was found in several provisions: lack of mutuality (the agreement exempted certain claims by the employer from arbitration), shortening of statutory limitations for claims, unreasonable restrictions on discovery rights, and an obligation for both parties to equally share arbitrator fees.
The courts determined that these terms were unfairly skewed in favor of Dermatology Management and could not be simply severed or modified without rewriting the contract entirely—something courts are generally unwilling to do as it would essentially create new terms not agreed upon by both parties initially.
Jenkins' lawsuit seeks injunctive relief and other equitable remedies for what she alleges are violations under California's Unfair Competition Law. Her legal team argues that enforcing such an imbalanced arbitration agreement would undermine employees' rights and allow employers to continue imposing unjust conditions without consequence.
Representing Annalycia Jenkins are attorneys Edwin Aiwazian, Elizabeth Parker-Fawley, and Arman Marukyan from Lawyers for Justice. On behalf of Dermatology Management, Kevin D. Sullivan and Benjamin T. Runge from Epstein Becker & Green serve as counsel. The case was presided over by Judge Tana L. Coates at the Superior Court level with appellate judges Gilbert P.J., Yegan J., and Baltodano J., reviewing it under Case ID B333759.