A new hire signs an employment agreement. The agreement contains an arbitration provision. Embedded in the arbitration provision is a one‐sentence delegation clause granting the arbitrator exclusive authority to decide threshold issues of arbitrability, including whether the arbitration provision is valid and enforceable. The agreement has a general choice‐of‐law clause providing that California law applies to the entire agreement, including the arbitration provision and delegation clause. An employee based outside California sues the employer in court and argues that the arbitration provision and delegation clause are unenforceable. Should the court apply California law or the law of the employee’s home state to the enforceability analysis? Several courts have confronted and wrongly answered that question in recent litigation involving Uber. Why they got it wrong—their misapplication of the Supreme Court’s severability rule—is the subject of this essay.
Volume 166 Issue 1 2018 Essay