Why Should a Wife Rank Lower Than an Employee?

Are wives less entitled to protection than workers? Are alimony and community property less important than a worker’s right to be treated fairly? And to what extent can a spouse or worker make an agreement limiting his or her rights?

These are questions raised by recent California Supreme Court decisions that involve separate areas of law but present the same issue: the enforceability of a contract limiting the courts’ role as protectors of the parties’ rights.

On Aug. 21, the court issued two premarital agreement opinions: Marriage of Bonds and Marriage of Pendleton. On Aug. 24, the court published an arbitration decision: Armendariz vs. Foundation Health Psychcare Services Inc.

The court made it easier to enforce a premarital agreement waiving community property and alimony and harder to enforce an arbitration agreement waiving a worker’s rights. An employer may impose an arbitration agreement as a condition of employment; the employee must promise to arbitrate disputes instead of filing a lawsuit.

Arbitration is attractive to employers. If an employee’s claims are submitted to a private judge (the arbitrator), the employee cannot appeal to the sympathy of a jury. The agreement may prevent the employee from recovering full damages.

In Armendariz, former employees sued Foundation Health Psychcare Services for discrimination, sexual harassment and wrongful discharge. Foundation wanted to enforce their agreements that the employees would submit to arbitration.

Ultimately, the court faced the question of enforcing those agreements. The court stressed that a worker cannot waive rights under the California anti-discrimination statute. But the court recognized that an employee’s promise to arbitrate discrimination claims may effectively waive those rights. If the arbitration is unfair, rights will be sacrificed.

To protect those statutory rights, the court decided that a mandatory arbitration agreement is enforceable only if the arbitration meets specified requirements of fairness. The court also adopted principles for enforcing arbitration agreements when a worker’s nonstatutory rights are at stake.

In Armendariz, the court limited arbitration agreements to protect workers’ rights, but it rejected limits on premarital agreements waiving alimony and community property. California statutes generally provide that all property acquired by a spouse during marriage is community property to be equally divided at dissolution.

In a premarital agreement, the parties usually agree that any acquisitions and earnings during marriage will be separate property and will not be shared at dissolution. It seems that premarital agreements usually harm women. Women as a group earn less than men.

By keeping the acquisitions of each spouse separate, the agreement shelters the earnings and acquisitions of the higher-paid spouse. It is no accident that in divorce cases throughout the United States, it is usually the husband, not the wife, who wants to enforce the premarital agreement.

In Bonds, the court decided when a premarital agreement is made “voluntarily.” The baseball player Barry Bonds and his future wife, Susann, signed a premarital agreement. Barry was represented by lawyers but Susann was not. Several years later at dissolution, Susann claimed she had not made the agreement voluntarily. The trial court found that Susann had made the agreement voluntarily and enforced it.

The Court of Appeal reversed the trial court, adopting a rule to ensure fairness: If one party is not represented by independent counsel, the premarital agreement should be strictly scrutinized for voluntariness.

But the Supreme Court rejected that approach as inconsistent with the California Family Code. The Court stated that the absence of independent counsel is just one factor among several for a court to consider.

In Pendleton, the other premarital agreement case, the court changed the law. It decided that a premarital agreement effectively can waive a party’s right to alimony. (Before Pendleton, such waivers of alimony violated public policy.)

These court cases involve disparate areas of law, so it may seem strange to read them together. But a reader of these opinions cannot help but wonder why it is so easy for a spouse (usually the wife) to waive her rights compared with a worker.

The community property system expresses society’s belief that marriage is an equal partnership. Community property and alimony should protect the weaker spouse at dissolution.

While spouses may be able to waive their rights, it should not be easy for them to do so.

The fault may be the Legislature’s for enacting a law that makes it too easy to enforce premarital agreements. Whether the fault lies with the court or the Legislature, a spouse’s rights should be as highly valued as a worker’s.