Hudson v. Bah Shoney's Corp., 263 F. Supp. 3d 661

Hudson was hired as a cashier by BAH Shoney’s on May 31, 2013 and signed an Employee Acknowledgment the same day acknowledging receipt of a 50‑page Employee Handbook that contained an Arbitration Policy.
The Arbitration Policy (pages 11–15) stated employment and continued employment constituted consent to binding arbitration of employment‑related claims and said the FAA governs the policy.
Hudson alleges immediate sexual harassment by a supervisor, multiple complaints to store management and HR, an EEOC charge (Oct. 31, 2013), suspension during investigation, and retaliatory discharge on March 19, 2014.
Hudson attested that she has a tenth‑grade education, was desperate for work, had less than 30 minutes during hiring to review paperwork, was instructed to sign many documents to keep the job, was not told about arbitration, and did not understand she was waiving the right to go to court.
BAH moved to compel arbitration and stay proceedings, relying on the signed Acknowledgment and the Handbook Arbitration Policy; Hudson opposed, arguing the waiver was not knowing and voluntary and that the agreement was unconscionable and ambiguous.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Hudson knowingly and voluntarily waived her Seventh Amendment right to a jury trial by signing the Acknowledgment	Hudson lacked education and sophistication, was rushed and pressured to sign, was not informed what arbitration meant, and thus did not knowingly waive jury rights	BAH argued the signed Employee Acknowledgment and Handbook incorporated a clear, mutual arbitration agreement governed by the FAA	Court: Waiver not knowing and voluntary — factors (education/background; time/opportunity to review; clarity of waiver) weigh against enforcement; arbitration denied
Whether arbitration agreement should be enforced as valid and mutual contract	Hudson also argued procedural/substantive unconscionability and ambiguity in the Handbook	BAH argued the Arbitration Policy and Acknowledgment constitute a binding, mutual contract to arbitrate all employment disputes	Court: Because waiver was not knowing/voluntary, court denied motion to compel without reaching unconscionability/ambiguity issues

Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468 (U.S. 1989) (parties may choose terms governing arbitration)
Glazer v. Lehman Bros., Inc., 394 F.3d 444 (6th Cir.) (arbitration order required upon showing valid agreement)
Hergenreder v. Bickford Senior Living Grp., LLC, 656 F.3d 411 (6th Cir. 2011) (waiver of jury right in arbitration context must be knowing and voluntary)
Morrison v. Circuit City Stores, Inc., 317 F.3d 646 (6th Cir. 2003) (factors to evaluate knowing and voluntary waiver)
Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370 (6th Cir. 2005) (education and rush at hiring weigh against waiver enforcement)
Cooper v. MRM Inv. Co., 367 F.3d 493 (6th Cir. 2004) (arbitration agreement eliminates jury right if agreement is enforceable)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (state contract law governs formation of arbitration agreements)