Zenia Chavarria v. Ralphs Grocery Company

Defendant Ralphs Grocery Company appeals the district court’s denial of its motion to compel arbitration. Plaintiff Zenia Chavarria filed an action alleging violations of the California Labor Code and California Business and Professions Code §§ 17200 et seq. She asserted claims on behalf of herself and a proposed class of other Ralphs employees. Ralphs moved to compel arbitration of her individual claim pursuant to its arbitration policy, to which all employees acceded upon submitting applications for employment with Ralphs. The district court denied the motion, holding that Ralphs’ arbitration policy was unconscionable under California law and therefore unenforceable.

Ralphs argues that its policy is not unconscionable under California law and in the alternative that the Federal Arbitration Act (“FAA”) preempts California law. The FAA provides that arbitration agreements must be enforced except “upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 . The FAA preempts a contract defense, such as uneonscionability, that may be generally applicable to any contract but disproportionately impacts arbitration agreements. AT&T…