"Cannot alter" language does not make arbitration agreement unconscionable

Gist v. ZoAn Management (Oregon Supreme Court 07/08/2022) [PDF] is a case that looked like a run-of-the-mill allegation that a driver claimed to be an employee but was wrongly classified as an independent contractor, and the defendant wanted to enforce an arbitration agreement.

But the plaintiff claimed the arbitration agreement was unconscionable, and had an interesting argument.

The agreement stated that the arbitrator "cannot alter, amend or modify the contract." From that, the plaintiff argued that the arbitrator lacked the power to grant him relief on his claims, and so the agreement was unconscionable. Specifically, the argument was that the contract classified the plaintiff as an independent contractor and the arbitrator lacked authority to conclude he was an employee and to enforce his rights as an employee under Oregon's wage and hour statutes.

The Oregon Supreme Court had little trouble brushing the plaintiff's argument aside because the defendant conceded that "An arbitration agreement that limits the arbitrator's authority to 'alter, amend, or modify' the terms of the contract does not limit any statutorily mandated rights." The court agreed with that interpretation of the "cannot alter" clause.

The court said, “the [contract] does not prevent the arbitrators from concluding that the [contract]'s provisions classifying the drivers as independent contractors are invalid or unenforceable and that plaintiff was an employee. If the arbitrators so conclude, then they can resolve plaintiff's claims under Oregon's wage and hour statutes.”

Oh, yes, then there's this: For the first time on appeal the plaintiff argued that drivers are exempt from the Federal Arbitration Act because they qualify for the transportation worker exception to the FAA. However, this was never raised below, the argument was not preserved, and the Supreme Court simply did not address it.