140 F.4th 322
6th Cir.2025Background
- Plaintiff Jessica Hines, a dancer, alleges she was undercompensated by National Entertainment Group, LLC (NEG), an adult entertainment club in Columbus, Ohio, and brings multiple wage-related claims under federal and state law.
- Between 2020 and 2023, Hines signed three identical 'Lease Waivers' containing mandatory arbitration provisions covering all work-related disputes.
- NEG moved to dismiss or stay the case pending arbitration, asserting Hines was bound by the arbitration agreements.
- Hines conceded she signed the agreements but argued they were unconscionable and thus unenforceable.
- The district court denied the motion to stay or compel arbitration, finding the arbitration provisions to be both procedurally and substantively unconscionable.
- On appeal, the Sixth Circuit reviewed whether the arbitration clause was indeed unconscionable under Ohio law and remanded for further proceedings after vacating the district court's decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural unconscionability | Imbalance of bargaining power; lack of review or explanation; felt rushed and in vulnerable state when signing | Lease Waiver was clear, conspicuous, not hidden, and Hines had capacity to read and understand | Arbitration clause not procedurally unconscionable |
| Substantive unconscionability | Arbitration provision not supported by consideration, and related unrelated contract terms are unconscionable | Mutual agreement to arbitrate constitutes sufficient consideration; unrelated terms irrelevant | Arbitration clause not substantively unconscionable |
| Application of unconscionability tests | Clause should be judged alongside other allegedly unconscionable provisions | Severability requires only arbitration clause itself to be judged for enforceability | Only arbitration clause evaluated—others for arbitrator |
| Relevance of contract formation context | Signing under duress or pressure due to work conditions | No evidence of coercion or inability to refuse; economic pressure alone insufficient | No coercion or lack of capacity found |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (arbitration agreements can be invalidated by generally applicable contract defenses such as unconscionability)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (arbitration provisions are severable from the underlying contract; challenges to the contract as a whole are for the arbitrator)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (state contract law governs the enforceability of arbitration agreements)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (federal policy favors arbitration, but only as agreed by the parties)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (courts consider challenges to the arbitration agreement itself, not the validity of the whole contract)
- Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63 (court must determine if arbitration agreement itself is challengeable before ordering arbitration)