The U.S. Supreme Court has agreed to review whether the Federal Arbitration Act (FAA) preempts a California state court rule on unconscionable provisions that is purportedly applied more stringently to arbitration agreements than to other contracts. Under the California rule, arbitration agreements with more than one unconscionable provision may not be enforced despite an express severability clause.
In MHN Government Services, Inc., et al. v. Zaborowski, et al., Case No. 14-1458 (cert. granted 10-1-15), the justices will consider the Ninth Circuit’s 2-1 opinion that denied arbitration of Fair Labor Standards Act (FLSA) and state court claims brought by consultants who offer short-term financial, child services, and victim-advocacy counseling at U.S. military installations. Continue Reading