Why it matters: An employer’s failure to translate portions of an employment contract rendered it unconscionable, according to a recent decision from a California appellate court. New employees of a car wash were presented with a document to sign that contained some sections in English and others in Spanish. The employees – who did not speak English – said they were fearful of losing their jobs if they didn’t sign, and were not provided with an explanation of what the documents contained. When they later filed a wage and hour class action, the employer filed a motion to compel arbitration based on the agreement. But an appellate panel said the employer “hid” information from the employees by failing to translate key provisions. In addition, by translating some but not all of the agreement, the employer demonstrated an awareness of the need to translate the document but decided not to do so. California courts have been friendly to arbitration provisions lately, but the latest decision demonstrates that the courts have boundaries on what they will allow.

Detailed Discussion

A few weeks after beginning work at Millennium Car Wash, Esteban Carmona was given a document by his manager. Carmona later testified that he believed it was a work document and that he needed to sign it to keep his job. He said the manager did not explain the document, and being unable to speak or read English, he did not understand the parts of the agreement that had not been translated into Spanish. A second plaintiff made similar allegations.

Carmona and other car wash employees filed a wage and hour suit against Millennium and its sister company, Santa Monica Car Wash. The employers filed a motion to compel arbitration and a trial court denied it, ruling that the arbitration agreement was unconscionable.

The employers appealed. Relevant to the litigation, the agreement contained an arbitration clause, a confidentiality clause, and an additional confidentiality subagreement that included an enforceability clause. In addition to the arbitration provision, the enforceability clause also pertained to certain employee/employer disputes.

The arbitration clause and stand-alone confidentiality clause had been translated into Spanish, but the entire subagreement remained in English.

Reviewing the documents as a whole, the appellate panel found the agreement both procedurally and substantively unconscionable. Procedurally, the “car wash companies drafted these agreements and presented a printed form to [the plaintiffs], who both indicated that if they did not sign the agreement in the form presented, they would not be permitted to work at the car wash,” the court said.

“The companies hid the enforceability clause and the entire confidentiality subagreement by failing to translate that portion of the agreement into Spanish,” the panel wrote. “[The plaintiffs] could not read English, and yet the car wash companies provided the enforceability clause in English only. The car wash companies evidently knew the plaintiffs required Spanish translations because they provided some translation. The record does not reveal why the car wash companies did not translate the entirety of the employment agreement.”

Turning to substantive unconscionability, the panel said the agreement was lacking in mutuality in several regards. Only the employees agreed to arbitrate their claims, the court noted, while the car wash companies did not indicate they were bound by the clause, leaving the employer with a choice of forums. The enforceability clause also permitted the car wash companies to recover reasonable attorneys’ fees and costs with no reciprocal provision allowing employees a similar recovery. And the confidentiality clause mandated that employees discuss with the employer “any problems or concerns or anything else related to” their employment before disclosing any information to third parties, including attorneys or courts. No corresponding obligation bound the employer.

“The arbitration agreement here suffered from multiple defects demonstrating a systemic lack of mutuality that favored the car wash companies,” the court concluded, affirming a denial of the motion to compel arbitration.

To read the opinion in Carmona v. Lincoln Millennium Car Wash, click here.