Opinion ID: 1039181
Heading Depth: 3
Heading Rank: 3

Heading: Statute of Limitations Provision

Text: The arbitration agreement states, in part, Arbitration must be initiated within 6 months after the alleged controversy or claim occurred by 15 Brown v. MHN Government Services, eta!., No. 87953-2 submitting a written demand to the other party. The failure to initiate arbitration within that period constitutes an absolute bar to the institution of any proceedings. CP at 49. Under the Washington Minimum Wage Act, parties have three years to bring a claim. Seattle Prof'! Eng 'g Emps. Ass 'n v. Boeing Co., 139 Wn.2d 824, 837, 991 P.2d 1126, 1 P.3d 578 (2000). Brown and Hiett assert that requiring parties to initiate arbitration within six months is substantively unconscionable because it limits their right to damages for violations occurring up to three years prior to their complaint. We agree and find that the statute of limitations provision is substantively unconscionable. California authority suggests that a six-month statute of limitations clause in an arbitration agreement is substantively unconscionable where the underlying statute (here, the Washington Minimum Wage Act) provides a much longer period of time within which to assert a claim. Brown and Hiett cite to Cuadra v. Millan 4 in support of their argument that the statute of limitations provision would limit their recovery to the past six months' worth of wage claims: A cause of action for unpaid wages accrues when the wages first become legally due, i.e., on the regular payday for 4 952 P.2d 704, 17 Cal. 4th 855, 72 Cal. Rptr. 2d 687 (1998), abrogated on other grounds by Samuels v. Mix, 989 P.2d 701, 22 Cal. 4th 1, 91 Cal. Rptr. 2d 273 (1999)). 16 Brown v. MHN Government Services, et al., No. 87953-2 the pay period in which the employee performed the work; when the work is continuing and the employee is therefore paid periodically (e.g., weekly or monthly) a separate and distinct cause of action accrues on each payday, triggering on each occasion the running of a new period of limitations. It follows that such an action is timely as to all paydays falling within the relevant limitations period. For the same reason, in calculating the amount of unpaid wages due in such an action the court will count back from the filing of the complaint to the beginning of the limitations period ... and will award all unpaid wages earned during that period. I d. at 707 (citations omitted). The California Supreme Court's recitation of how a court should calculate back pay in a cause of action for unpaid wages is persuasive. It appears that the statute of limitations provision in this case would, in fact, limit the amount of available damages. Under California law, a statute of limitations provision is substantively unconscionable if it severely limits the time available to bring a statutory claim. See Martinez v. Master Prot. Corp., 118 Cal. App. 4th 107, 117, 12 Cal. Rptr. 3d 663 (2004) (holding that an employment arbitration agreement's six-month statute of limitations unlawfully restricted employee's ability to vindicate his rights and was therefore substantively unconscionable where the applicable statutes provide significantly longer periods within which to assert a claim). We accordingly find the statute of limitations provision substantively unconscionable. 17 Brown v. MHN Government Services, et al., No. 87953-2