Opinion ID: 1039181
Heading Depth: 3
Heading Rank: 5

Heading: Fee shifting Provision

Text: The arbitration agreement provides, in part, The prevailing party, or substantially prevailing party's costs of arbitration, are to be borne by the other party, including reasonable attorney's fees. CP at 49. Brown and Hiett claim that this provision is substantively unconscionable because under the Washington Minimum Wage Act, attorney fees can be recovered only by a prevailing employee, not an employer. RCW 49.48.030. We agree and find the fee shifting provision substantively unconscionable. Here, some of the underlying claims fall under the Washington Minimum Wage Act. Despite the choice of law provision, it is proper to consider Washington cases that have evaluated fee shifting provisions in the context of the underlying statutory claims. In Walters, Division One of the Court of Appeals held that mandatory fee shifting provisions in arbitration agreements are unconscionable where the Washington Minimum Wage Act provides that only a prevailing 19 Brown v. MHN Government Services, et al., No. 87953-2 employee would be entitled to recover costs and fees. The risk of having to pay the employer's expenses and fees was a significant deterrent to employees contemplating initiating an action to vindicate their rights. Walters v. A.A.A. Waterproofing, Inc., 151 Wn. App. 316, 321-22, 211 P.3d 454 (2009). Furthermore, the language in this agreement is mandatory, requiring that costs are to be borne by the other party. 6 CP at 49 (emphasis added). Cf Zuver v. Airtouch Commc 'ns, Inc., 153 Wn.2d 293, 310-11, 103 P.3d 753 (2004) (holding that an arbitration agreement's fee shifting provision was not substantively unconscionable where the language of the agreement is permissive rather than mandatory). Mandatory fee shifting provisions in arbitration agreements are substantively unconscionable where the Washington Minimum Wage Act provides that only a prevailing employee would be entitled to recover costs and fees. We find the fee shifting provision substantively unconscionable.