In Casas v. CarMax Auto Superstores California LLC, ___ Cal.App.4th ___  (March 20, 2014), the California Court of Appeal (Second Appellate District, Division One) reversed the order of the Los Angeles County Superior Court (Judge Kleifield) denying defendant’s motion to compel arbitration.

Plaintiff filed a complaint against defendant employer for wrongful termination and other employment-related claims stemming from the termination from his position as a service consultant, which he claimed was because of his refusal to participate in, and discussion of, defendant’s illegal actions. Defendant filed a motion to compel based on an arbitration agreement that plaintiff had signed as part of his application for employment almost four years earlier. Plaintiff opposed the motion, arguing that the arbitration agreement was not a contract, and that in any event the agreement was procedurally and substantively unconscionable. The trial court agreed with plaintiff, finding the arbitration agreement “illusory” (deceptive) because the rules accompanying it gave defendant the right to alter or terminate the agreement. Defendant appealed.

The appellate court reversed, concluding that, in light of the implied covenant of good faith and fair dealing, the arbitration agreement was not illusory: “  . . . . [E]ven a modification clause not providing for advance notice does not render an agreement illusory, because the agreement also contains an implied covenant of good faith and fair dealing [which] *  *   * ‘limits the employer’s authority to unilaterally modify the arbitration agreement . . . .’”