Opinion ID: 2632568
Heading Depth: 1
Heading Rank: 9

Heading: Remedies Limitation Provision

Text: Citing Armendariz, 24 Cal.4th at 119-20, 99 Cal.Rptr.2d 745, 6 P.3d 669, Zuver also argues that the agreement's provision stating, [y]ou hereby waive and release all rights to recover punitive or exemplary damages in connection with any common law claims, including claims arising in tort or contract, against U S West, is substantively unconscionable because it applies only to her, i.e., the provision is unilateral. [12] CP at 36. In Armendariz, the California Supreme Court held that an arbitration provision which required that the employee arbitrate his wrongful discharge claims but did not require the employer to arbitrate all claims arising out of the same transaction or occurrence or series of transactions or occurrences, is not bilateral, and is thus, substantively unconscionable. 24 Cal.4th at 120, 99 Cal.Rptr.2d 745, 6 P.3d 669. Similar to the employee in Armendariz, Zuver contends that the provision in her agreement pertaining to punitive or exemplary damages fails to equally apply to Airtouch, e.g., Airtouch could still seek punitive or exemplary damages against her for claims based on disclosure of confidential information in Colorado, [13] which pursuant to the agreement, is the substantive law governing all common law claims. [14] See Rubenstein v. S. Denver Nat'l Bank, 762 P.2d 755, 757 (Colo.Ct.App.1988) (holding that exemplary damages for breach of the duty of nondisclosure are available when a plaintiff has an adequate remedy at law for damages). However, relying on Raasch v. NCR Corp., 254 F.Supp.2d 847 (S.D.Ohio 2003), Airtouch contends that complete mutuality of remedies is not required in arbitration agreements. [15] In Raasch, a federal district court considered Raasch's assertion that her arbitration agreement did not impose mutual obligations since it excluded disputes over confidentiality, noncompete agreements, or intellectual property rights. 254 F.Supp.2d at 855. The court rejected Raasch's claim, reasoning that: Mutuality requires only that both Raasch and NCR be bound to the terms of any dispute that is required to be submitted to the arbitrator.... That is all that is required insofar as mutuality of obligation is concerned; nothing in that doctrine requires that just because both parties agree to arbitrate discrimination disputes and the like they must also agree to arbitrate every other type of dispute. Id. at 856-57. See also In re FirstMerit Bank, N.A., 52 S.W.3d 749, 757 (Tex.2001); Harris v. Green Tree Fin. Corp., 183 F.3d 173, 179-80 (3d Cir.1999). Like the Raasch court, Washington courts have long held that mutuality of obligation means both parties are bound to perform the contract's terms  not that both parties have identical requirements. See Metro. Park Dist. of Tacoma v. Griffith, 106 Wash.2d 425, 434, 723 P.2d 1093 (1986) (A supposed promise is illusory when its provisions make its performance optional or discretionary on the part of the claimed promisor.) (citing Wharf Rest., Inc. v. Port of Seattle, 24 Wash.App. 601, 609, 605 P.2d 334 (1979)). Zuver, however, does not simply argue that the arbitration agreement here lacks mutuality. [16] See Brem-Rock, Inc. v. Warnack, 28 Wash.App. 483, 489 n. 8, 624 P.2d 220 (1981) (noting if a contract lacked a `corresponding duty,' by the party seeking enforcement, a contract would be unenforceable for lack of mutuality, not unconscionab[ility]), overruled on other grounds by, French v. Sabey Corp., 134 Wash.2d 547, 557, 951 P.2d 260 (1998). Rather, she contends that the effect of this provision is so one-sided and harsh that it is substantively unconscionable. We agree. [17] Indeed, this provision appears to heavily favor Airtouch. It bars Zuver from collecting any punitive or exemplary damages for her common law claims but permits Airtouch to claim these damages for the only type of suit it would likely ever bring against Zuver, that is, for breach of her duty of nondisclosure of Airtouch's confidential information. The remedies limitation provision blatantly and excessively favors the employer in that it allows the employer alone access to a significant legal recourse. Consequently, we conclude that this provision is substantively unconscionable in these circumstances. [18]