Finding that an employment arbitration agreement was procedurally and substantively unconscionable, a U. S. District Court for the Northern District of California, in Capili v. The Finish Line, Inc., held that the employer's offer to waive the unconscionable provisions would not save it from unenforceability.
The arbitration agreement in Capili contained several substantially unconscionable provisions—including a forum selection clause that designated Indiana as the forum for disputes for California employees, an exemption of trade secret claims asserted by Finish Line, and an equal sharing of arbitration costs—all of which Finish Line offered to waive. The court held that the mere inclusion of the unconscionable provisions has a chilling effect that is not curable, and if an employer, when the provisions are challenged, could lawfully waive the right to enforce them, it would create a perverse incentive for employers to add unconscionable provisions to arbitration agreements. The court denied Finish Line's attempt to compel arbitration.
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