Opinion ID: 2632735
Heading Depth: 1
Heading Rank: 12

Heading: Severance of the Substantively Unconscionable Provisions

Text: Fred Lind Manor urges us to sever any provisions we find to be substantively unconscionable arguing that the essential term of the parties' bargain, i.e., arbitration, should be retained. Adler, however, contends that because the substantively unconscionable provisions pervade the entire agreement, we should refuse to sever those provisions and declare the entire agreement void. See Ingle, 328 F.3d at 1180 (holding that the employer's insidious pattern of seeking to tip the scales in its favor during employment disputes justified a decision to declare the entire agreement unenforceable). The 2 Restatement (Second) of Contracts § 208 (1981) provides that: If a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result. (Emphasis added.) For contracts concerning leases, sales, real property, and retail installments, our legislature has adopted the Restatement position directing that in cases where these contracts are found to contain an unconscionable provision, courts may enforce the remainder of the ... contract without the unconscionable clause. RCW 62A.2A-108(1); RCW 62A.2-302; RCW 64.34.080; RCW 63.14.136. The Restatement position concerning severance of unconscionable provisions should also apply in cases where courts are confronted with substantively unconscionable provisions in employment arbitration agreements. [14] Accord Helstrom v. N. Slope Borough, 797 P.2d 1192, 1200 (Alaska 1990); Faber v. Menard, Inc., 367 F.3d 1048, 1054 (8th Cir.2004); Gannon v. Circuit City Stores, Inc., 262 F.3d 677, 682-83 (8th Cir.2001); Spinetti v. Serv. Corp. Int'l, 324 F.3d 212, 221-22 (3d Cir.2003); Parilla v. IAP Worldwide Servs. V.I., Inc., 368 F.3d 269, 288 (3d Cir.2004). Application of this rule facilitates the accomplishment of important federal and state public policies favoring arbitration of disputes. See Gannon, 262 F.3d at 682 (noting that if courts declared an entire arbitration agreement invalid even if the agreement contained only one invalid provision, such a result would discourage parties from arbitrating their disputes). Nonetheless, we acknowledge that in instances where an employer engages in an insidious pattern of seeking to tip the scales in its favor in employment disputes by inserting numerous unconscionable provisions in an arbitration agreement, courts may decline to sever the unconscionable provisions. Ingle, 328 F.3d at 1180. In this case, however, Adler's and Fred Lind Manor's arbitration agreement contains just two substantively unconscionable provisions. The primary thrust of their agreement is the agreement to arbitrate. Consequently, we can sever the unconscionable attorney fees and limitations provisions, without disturbing the primary intent of the parties to arbitrate their disputes. [15] See Spinetti, 324 F.3d at 222-23.