Stirlen

The San Francisco Superior Court refused to enforce a compulsory arbitration clause of an employment contract on the grounds it was against public policy and unconscionable. We find this determination correct and hold that, in the circumstances of this case, the governing state law pertaining to unconscionable contracts (Civ. Code, § 1670.5) is not preempted by the Federal Arbitration Act. ( 9 U.S.C. §§ 1-14 .)

I.

Defendants Supercuts, Inc., and David E. Lipson, its president and chief executive officer (hereinafter collectively referred to as Supercuts), appeal from an order denying their motion to compel arbitration of a dispute relating to the termination from employment of plaintiff William N. Stirlen.

Supercuts, a Delaware corporation that conducts a national hair care franchise business, employed Stirlen as its vice-president and chief financial officer from January 1993 until March 1994, when he was terminated.

Stirlen commenced this wrongful discharge case in December 1994. His complaint alleged seven causes of action for (1) a judicial declaration that an arbitration clause in his employment contract was null and void in certain particulars and unenforceable;…