Circuit City Stores, Inc. v Mantor
•Paul Mantor sues Circuit City Stores, Inc. alleging twelve causes of action. •State Court granted Circuit City’s motion to compel Arbitration. •Mantor appealed that the arbitration agreement was unenforceable due to it being unconscionable.
If the arbitration agreement between Circuit City Stores, Inc. and Paul Mantor was unconscionable?
•In 1995, Circuit City Stores, Inc. instituted an arbitration program called “Associate Issue Resolution Program.” •In 1998, Paul Mantor met with managers to discuss the options of either joining Circuit City’s AIRP arbitration program or be terminated from the company. •Mantor agreed on participating in the AIRP.
Rules Of Law
1. A court may refuse to enforce a contract if it is unconscionable. 2. The court will look at whether a contract is procedurally or substantively unconscionable. 3. The court has the discretion of whether to sever particular terms of unconscionability or invalidate the whole contract. 4. A party may not create an adhesive arbitration agreement that signification takes away the other party’s right to substantiate his legal claims.
•The court stated that since Mantor had no meaningful opportunity to use his putative “right” to opt-out of the arbitration agreement due to the pressure and threats of employment termination should he decline their contract, as this constitutes procedural unconscionability. •Since Circuit City’s fee waiver rule states that an employee must pay a fee for bringing a complaint and that the company has the responsibility of the decision to waive the filing fee, the court ruled that this was manifestly one-sided in the circuit city’s favor and constitutes substantive unconscionability. •The court found that the arbitration agreement between Circuit City and Mantor was unenforceable because there was procedural unconscionability and the provisions in the...