Cara New v. Gamestop, Inc.
232 W. Va. 564
| W. Va. | 2013Background
- Cara New was hired by GameStop in 2009 and received a 40‑page Store Associate Handbook plus a separate 14‑page GameStop C.A.R.E.S. Rules document (an internal multi‑step dispute resolution program that includes binding arbitration).
- New signed a separate Acknowledgment stating she received the Handbook and C.A.R.E.S. Rules and that by continuing employment she agreed all workplace disputes would be resolved under C.A.R.E.S. rather than in court.
- New sued GameStop (wrongful discharge, sexual harassment, hostile work environment, IIED, NIED, wage act violations) in Logan County Circuit Court in 2011.
- GameStop moved to dismiss and compel arbitration under its C.A.R.E.S. program; the circuit court granted dismissal pending arbitration and New appealed.
- The Supreme Court of Appeals of West Virginia reviewed de novo whether a valid arbitration agreement existed and whether it was unconscionable; the Court affirmed the trial court and compelled arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid arbitration agreement was formed | New argued the Handbook disclaimer (that the Handbook is not an employment contract) meant no mutual assent to arbitrate existed | GameStop argued the C.A.R.E.S. Rules and the separate signed Acknowledgment plainly created a mutual, binding arbitration agreement | Held: Valid agreement formed — the separate, clear C.A.R.E.S. Rules and signed Acknowledgment show mutual assent despite the Handbook disclaimer |
| Whether the Handbook disclaimer nullifies the arbitration clause | New: disclaimer negates contractual effect of Handbook materials, so arbitration clause not binding | GameStop: arbitration clause was separate, contractual in language, and the disclaimer only preserved at‑will status | Held: Disclaimer did not nullify C.A.R.E.S.; arbitration clause is distinct and unambiguous, so enforceable |
| Procedural unconscionability (formation process, adhesion) | New: agreement was a contract of adhesion imposed as a condition of employment; she had no bargaining power or meaningful alternatives | GameStop: New was an adult able to understand and refuse employment; C.A.R.E.S. was presented and signed; no evidence of incapacity, fraud, or duress | Held: Not procedurally unconscionable — no evidence New lacked capacity or notice; signing the acknowledgment and continued employment suffice to show assent |
| Substantive unconscionability (one‑sided terms — modification clause) | New: provision allowing GameStop to modify/discontinue C.A.R.E.S. gives employer unilateral power, so lack of mutuality makes the clause unconscionable | GameStop: modification is limited — 30 days’ notice, prospective only, and pending claims proceed under the terms in effect when filed | Held: Not substantively unconscionable — the 30‑day prospective notice and protection for pending claims provide sufficient mutuality and are not overly harsh |
Key Cases Cited
- State ex rel. McGraw v. Scott Runyon Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995) (motion to dismiss review is de novo)
- Brown v. Genesis Healthcare Corp., 228 W.Va. 646, 724 S.E.2d 250 (2011) (standards on FAA enforcement and unconscionability doctrine)
- State ex rel. Johnson Controls, Inc. v. Tucker, 229 W.Va. 486, 729 S.E.2d 808 (2012) (FAA places arbitration agreements on equal footing; contract defenses apply)
- Bennett v. Dove, 166 W.Va. 772, 277 S.E.2d 617 (1981) (unambiguous written instruments control)
- Dan Ryan Builders, Inc. v. Nelson, 230 W.Va. 281, 737 S.E.2d 550 (2012) (mutuality and substantive unconscionability analysis)
- Patterson v. Tenet Health Care, 113 F.3d 832 (8th Cir. 1997) (handbook disclaimer does not defeat a separate arbitration acknowledgement)