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The Franchise Memorandum

California State Court Upholds Denial of Motion to Compel Arbitration on Unconscionability Grounds
Posted in Arbitration

In a non-franchise case, the court in Liebrand v. Brinker Rest. Corp., 2008 WL 2445544 (Cal. App. 4 Dist. June 18, 2008), upheld the trial court’s denial of Brinker’s motion to compel arbitration, concluding it had failed to meet its burden of proving Liebrand agreed to arbitrate an employment dispute. The trial court determined that the arbitration agreement was void because it was both procedurally and substantively unconscionable, specifically because it was an adhesion contract that mandated arbitration take place in Texas and required that Liebrand share the costs. On appeal, the court affirmed, holding that the agreement was an oppressive and adhesive arbitration agreement and was essentially a condition of employment.

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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