Lacie Cyless Smith v. Express Check Advance of Mississippi, LLC
153 So. 3d 601
Miss.2014Background
- Smith signed a two-page Non-Competition and Confidentiality Agreement containing a broad arbitration clause and a provision for Express Check to seek injunctive relief; she separately acknowledged reading and accepting the arbitration provision.
- The arbitration clause covers “any employment-related dispute” and explicitly includes claims such as wrongful discharge and Title VII, and states that disputes will be resolved only by arbitration with final and binding arbitrator decisions and no merits appeal.
- Express Check terminated Smith, who then filed suit in circuit court; Express Check moved to compel arbitration under the agreement.
- Smith challenged the clause as procedurally and substantively unconscionable, arguing lack of meaningful choice, duress, and high arbitration costs; she failed to produce evidence of arbitration costs.
- The trial court found the agreement not procedurally unconscionable and not substantively unconscionable; the Mississippi Supreme Court affirmed, focusing on FAA policy and burden on the party challenging unconscionability.
- Dissent argued the contract was an adhesion contract with oppressive terms that could render the arbitration clause unconscionable and unenforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause is enforceable under the FAA | Smith contends unconscionability voids enforcement | Express Check contends FAA favors arbitration, burden on challenger | Arbitration enforced; unconscionability not shown |
| Procedural unconscionability | Arbitration presented as take-it-or-leave-it; lack of meaningful choice | No evidence of concealment or lack of knowledge; Smith read it | Not procedurally unconscionable |
| Substantive unconscionability | Terms are oppressive; one-sided remedies allow court access for employer | Mutual arbitration with limited injunctive relief; no extreme disparity | Not substantively unconscionable under record; arbitration compelled |
| Adhesion and market factors | Contract is adhesion; disparity in bargaining power suggests oppression | Adhesion alone not enough; must show oppression or lack of meaningful choice | Adhesion status acknowledged but did not render the clause unconscionable under the facts |
Key Cases Cited
- Covenant Health & Rehab., LP v. Estate of Moulds, 14 So.3d 695 (Miss.2009) (defines unconscionability and discussions of adhesion and arbitration)
- East Ford, Inc. v. Taylor, 826 So.2d 709 (Miss.2002) (procedural vs substantive unconscionability; adhesion considerations)
- Entergy Miss., Inc. v. Burdette Gin Co., 726 So.2d 1202 (Miss.1998) (evidence required for unconscionability; market factors considerations)
- Caplin Enterprises, Inc. v. Arrington, 145 So.3d 608 (Miss.2014) (adhesion contracts; oppressive arbitration clauses; Arrington analysis)
- Pitts v. Watkins, 905 So.2d 553 (Miss.2005) (substantively unconscionable when arbitration imposes costs/limits for other party)