Established 1958 ~ Hardball Business Litigation & Complex Negotiations

Eastern District of Pennsylvania Rules Against Plaintiff’s Claim that Arbitration Clause is Unconscionable

In Curtis v. Cintas Corporation, Plaintiff was terminated by her employer and she asserted claims for racial discrimination and retaliation.  229 F.Supp.3d 312, 315 (E.D. Pa. 2017).  Although Plaintiff sought to litigate her case in court, Defendant moved to dismiss her claims, and in the alternative, stay proceedings pending arbitration, as Defendant claimed that Plaintiff’s employment agreement contained an arbitration clause. In response, Plaintiff asserted that the arbitration agreement was unconscionable and therefore, invalid and unenforceable.

Under Pennsylvania law, to prove a claim of unconscionability, a plaintiff must prove that the contract was both substantively and procedurally unconscionable. Substantive unconscionability occurs when the contractual terms are unreasonable or grossly favorable to one side, which the disfavored party does not assent to.  In this case, Plaintiff asserted that Defendant is inherently favored because the employer pays the costs for arbitration.  However, the Eastern District Court of Pennsylvania pointed to case law stating that limiting costs to one party does not support a finding of substantive unconscionability. Procedural unconscionability pertains to the process in which an agreement is reached, but the form of the agreement is unclear.  Here, Plaintiff claimed that the agreement was procedurally unconscionable because she signed only on the last page, and that page did not contain an arbitration clause.  However, the Court explained that there is no requirement in Pennsylvania to affix a signature to each section or page of an agreement to manifest an in intent to be bound by the terms.

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