Too much unconscionability to enforce Monster Energy's arbitration agreement

Arbitration agreements are generally favored and routinely enforced by California courts. In a rare loss for an employer, Monster Energy Co. was unsuccessful in convincing a court of appeal that a routine employment claim should be ordered to arbitration. The details of the provisions in Monster's arbitration agreement may help other employers avoid a similar fate.

Background

Gerald Lange was hired by Monster Energy to work as a "Monster ambassador" in October 2006. Lange signed an employment agreement that contained a seemingly standard arbitration clause requiring any disputes between him and Monster arising out of his employment or the termination of his employment to be resolved through binding arbitration in accordance with the JAMS Comprehensive Arbitration Rules and Procedures applicable to employment disputes.

The arbitration clause included a provision stating that except as allowed by statutory claims, an "arbitrator shall have no authority to award punitive or exemplary damages or any other amount for the purpose of imposing a penalty." In addition, the agreement contained jury trial waiver language that stated, "In the event that any controversy or claim is determined in a court of law, both you and the company hereby irrevocably waive any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement, the breach thereof or the employee's employment or other business relationship."