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Stirlen v. Supercuts, Inc.

California Court of Appeals
60 Cal. Rptr.2d 138 (1997)


Facts

Supercuts, Inc. (codefendant), employed William Stirlen (plaintiff) as its vice president and chief financial officer under an employment contract that included an arbitration clause. The contract required employees to submit all disputes to arbitration and limited all remedies available to them to breach of contract damages only. Conversely, the contract allowed Supercuts to sue in court and did not limit its remedies. According to Stirlen, Supercuts required all executives to sign the same contract, on a take-it-or-leave-it basis. Supercuts terminated Stirlen after he told president and CEO David Lipson (codefendant) and other executives about accounting irregularities that might violate state and federal regulations, as well as operating problems Stirlen believed contributed to Supercuts’s decline. Stirlen sued Supercuts and Lipson for wrongful termination. Supercuts moved to compel arbitration, but the trial court refused, finding the arbitration provisions unconscionable and thus unenforceable. Supercuts appealed.

Rule of Law

Issue

Holding and Reasoning (Kline, J.)

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