Kapas v. eBay
No. 09-4200 (10th Cir. Nov. 2, 2010)

On November 2, 2010, the Tenth Circuit upheld an arbitration agreement between the online auction house, eBay, and a former employee, Emmanuel Kepas. Kepas argued the arbitration agreement he signed as a condition of his employment was unconscionable and violated California law under Armendariz v. Foundation Health Psychcare Services Inc.¹ The court agreed Armendariz would apply because Kepas was required to sign an arbitration agreement which waived his statutory rights under Title VII and the ADEA.² Armendariz provides that all arbitration agreements must meet five (5) minimum standards, including neutral arbitrators, minimal discovery, a written award, availability of all types of relief that would otherwise be available in court, and a requirement that employees not pay unreasonable costs and arbitrator fees or expenses as a condition of access.³  Kepas argued eBay’s arbitration agreement violated these standards by imposing arbitrator fees and American Arbitration Association (AAA) costs on its employees.⁴ The court agreed, stating “the Arbitration Agreement impermissibly imposes a significant risk of these costs on employees.”⁵ However, the court determined that, with a severing of the cost-assessment provision, the remainder of the arbitration agreement was enforceable.⁶

¹ Kepas v. eBay, 2010 U.S. App. LEXIS 22979 at *7 (10th Cir. Nov. 2, 2010); see generally 24 Cal. 4th 83 (2000).
²  Kepas, 2010 U.S. App. LEXIS at *8; see also Armendariz, 24 Cal. 4th at 99-102.
³  Kepas, 2010 U.S. App. LEXIS at *8; see also Armendariz, 24 Cal. 4th at 102.
⁴  Kepas, 2010 U.S. App. LEXIS at *9.
⁵  Id. at *10.
⁶  Id. at *25-7.