Unconscionability in Employment Contracts


Added on  2019-09-18

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Chretian v. Donald L. Bren Co.Court of Appeal of California, Fourth Appellate District, Division OneJanuary 27, 1984 Civ. No. 28402 Reporter151 Cal. App. 3d 385; 198 Cal. Rptr. 523; 1984 Cal. App. LEXIS 1558LEONARD CHRETIAN, Plaintiff and Respondent, v. DONALD L. BREN COMPANY, Defendant and AppellantPrior History:[***1] Superior Court of San Diego County, No. 474143, Daniel C. Leedy, Judge. Disposition:The judgment of $ 18,938.82 is modified to $ 2,000 and, as modified, the judgment is affirmed. Case SummaryProcedural PostureAppellant, a company that sold homes, sought review of the judgment of the Superior Court, San Diego County (California),which awarded respondent, a terminated commissioned salesperson, a contractually unearned commission after it determinedthat the contractual provision at issue was unconscionable.OverviewAppellant company sold homes to the public through commissioned salespersons. Appellant's contract with its salespersons,including respondent, provided for two separate commissions. The first commission was earned for obtaining a fully executedpurchase and sales agreement which subsequently closed escrow, and the second was for servicing the sale transaction throughsuccessful close of escrow. Upon termination of a salesperson's employment, the salesperson was entitled to both commissionsfor escrows closed before the termination. For transactions pending at that date, however, only the first commission was to bepaid upon the close of escrow. Respondent's employment was terminated before the second commission could be earned. Thecourt below awarded the second commission after it found respondent's loss of the commission to be unconscionable as amatter of law. On appeal, the court found that the contract was not unconscionable because it was substantively reasonable andbecause the nonadhesive contract was not marred by procedural infirmity. The trial court's award was modified to reflect onlythe amount appellant had conceded as improperly withheld from the first commission.OutcomeThe judgment, which awarded respondent commissioned salesperson a contractually unearned commission after it wasdetermined that the contractual provision at issue was unconscionable, was modified to reflect only the amount that appellantcompany had conceded as improperly withheld from respondent. Contrary to the trial court's judgment, the court found that thecontract was not unconscionable because it was substantively reasonable.Counsel:Haskins, Nugent, Newnham, Kane & Zvetina and Raymond F. Zvetina for Defendant and Appellant.Marsh & Graves and Edward E. Marsh, Jr., for Plaintiff and Respondent. Judges:Opinion by Weiner, J., with Brown (Gerald), P. J., and Work, J., concurring. Opinion by:WIENER Opinion
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