Engalla v. Permanente Medical Group, Inc.: Can Arbitration Clauses in Employment Contracts Survive a Fairness Analysis?

This Note examines the California Supreme Court\u27s treatment of binding arbitration clauses in Engalla v. Permanente Medical Group, Inc. Rather than limit its review to the traditional arbitration issues of formation and consent, the Engalla Court carefully scrutinized the functions and procedures of a particular arbitration process. By refusing to compel arbitration in this case, the decision implies that minimum levels of procedural fairness will be required for all arbitration systems. An increase in the judicial scrutiny of arbitration clauses has important implications for the employment context where the use of binding arbitration clauses has become increasingly prevalent. This Note discusses the impact of the Engalla decision on the use of arbitration clauses in employment agreements. The Author then considers what type of arbitration process will be able to withstand judicial scrutiny in the future