Seyfarth Synopsis: In OTO,
LLC v. Kho, the California Labor Commissioner challenged a car
dealership’s mandatory arbitration agreement. The agreement
required employment disputes to be arbitrated under normal civil
litigation rules, before a retired superior court judge, and waived
the right to submit wage claims to the Labor Commissioner. The
Court of Appeal upheld the agreement even though the agreement
bypassed the Labor Commissioner hearing process, and even though
the Court was “disturbed” by the way that the employer
had drafted and presented the agreement.
The Facts
Ken Kho worked as an auto mechanic for a car dealership. Three
years into his employment, he was handed a one and one-quarter page
agreement entitled, “Employment At-Will and
Arbitration.” The terms of the agreement, appearing in tiny
seven-point font within a one-block paragraph, required Kho and the
dealership to arbitrate their disputes before a retired superior
court judge. The arbitration
