We normally think that a partner in a law firm is not an "employee," and therefore statutory protections for employees (e.g., Title VII) do not apply. Likewise, there's an assumption that a law firm partner is a sophisticated player and thus not given special common-law protections that courts provide for employees.
Well, take a look at Ramos v. Superior Court (California Ct App 11/02/2018) [PDF]. Here, in deciding not to enforce an arbitration agreement, the California Court of Appeal treated a law firm partner as if she were an employee. But of course not coming right out and saying she was an employee.
Ramos, a former "income partner" at a law firm, sued asserting various causes of action under state law for discrimination, retaliation, wrongful termination, and anti-fair-pay practices. The trial court granted the firm's motion to compel arbitration, after severing provisions of the arbitration agreement related to venue and cost-sharing. The California Court of Appeal held that the arbitration agreement was unconscionable and void under the framework in Armendariz v. Foundation Health Psychcare Services, 24 Cal.4th 83 (2000), and ordered the trial court to deny the motion to compel arbitration.
(1) The court held that Ramos's claims fell within the scope of the arbitration agreement.
(2) The court held that Armendariz is still good law, even after the US Supreme Court's decision in AT&T Mobility LLC v. Concepcion 563 U.S. 333 (2011).
(3) The parties disagreed as to whether Ramos was a partner or an employee, but the court applied the Armendariz analysis because Ramos's claims encompass the statutory rights Armendariz held are unwaivable, and the firm "was in a superior bargaining position vis-à-vis Ramos akin to that of an employer-employee relationship, and there is no evidence in this record that Ramos had an opportunity to negotiate the arbitration provision."
(4) One provision in the agreement prevents Ramos from obtaining remedies available under her statutory claims, so that provision is unenforceable. Another provision requires Ramos to pay arbitration fees and costs that she would not have to pay if she litigated her statutory claims in court, which is inconsistent with Armendariz.
(5) The court found that the provision requiring all aspects of the arbitration be maintained in strict confidence is substantively unconscionable. This is because she would be in violation if she attempted to informally contact or interview any witnesses outside the formal discovery process, would unnecessarily increase her costs, and "unreasonably favors the employer to the detriment of employees seeking to vindicate unwaivable statutory rights and may discourage potential plaintiffs from filing discrimination cases."
(6) The court refused to sever the unlawful provisions from the contract. "Because we are unable to cure the unconscionability simply by striking these clauses, and would instead have to reform the parties' agreement in order to enforce it, we must find the agreement void as a matter of law."