Lesneski v. Ross Stores, Inc, 3:16-cv-00754

Plaintiff Amy Lesneski was hired by Ross Stores as a distribution center supervisor on October 6, 2014, and signed a Dispute Resolution Agreement (DRA) on December 18, 2014 requiring final and binding arbitration for covered employment disputes.
The DRA expressly covers Title VII and other statutory and common-law employment claims and includes a waiver of jury trial and a class-action waiver.
Lesneski resigned June 25, 2015 and filed this federal lawsuit alleging Title VII gender harassment and related common-law claims on November 1, 2016.
Defendants moved to dismiss or stay and compel arbitration under the Federal Arbitration Act (FAA); defendants provided the DRA to plaintiff after suit was filed.
Plaintiff argued the DRA was invalid: procedurally and substantively unconscionable and lacking consideration because it was signed after hiring. Defendants argued the DRA is valid, mutual, and covers the dispute.
The Court concluded the FAA applies, found the DRA valid (no procedural or substantive unconscionability and adequate consideration), compelled arbitration, stayed the case, and denied the request for attorneys’ fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FAA applies / transaction involves interstate commerce	Not disputed	Ross is a multistate company; DRA governs employment disputes	Held: FAA applies; Ross’s multistate operations suffice to show commerce involvement
Procedural unconscionability of DRA	DRA was presented two months after hiring, signing was take-it-or-leave-it, unequal bargaining power	Arbitration after hire is upheld in analogous cases; no evidence of unfair surprise or coercion here	Held: Plaintiff failed to prove procedural unconscionability
Substantive unconscionability (terms one-sided)	Class-action waiver and waiver of jury are oppressive; plaintiff did not understand terms	DRA lists covered disputes, advised right to seek counsel; terms are not so one-sided as to "shock the conscience"	Held: No substantive unconscionability proven
Consideration for an arbitration agreement signed post-hire	Agreement signed after employment requires new consideration	Mutual promises to arbitrate constitute adequate consideration	Held: Mutual arbitration agreement supplies valid consideration
Request for attorneys’ fees/sanctions for bad-faith litigation	Defendants claim plaintiff acted in bad faith by not dismissing after notice of arbitration	Plaintiff did not disobey an order or otherwise act in a way showing bad faith; DRA protects associates who challenge enforceability	Held: Motion for attorneys’ fees denied

Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (U.S. 2001) (FAA applies in employment context for employers engaged in interstate commerce)
Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265 (U.S. 1995) (FAA’s commerce requirement construed broadly to cover transactions that affect interstate commerce)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (arb. agreements are enforceable subject to generally applicable contract defenses)
Chambers v. NASCO, Inc., 501 U.S. 32 (U.S. 1991) (federal courts have inherent power to assess attorneys’ fees for bad-faith conduct)
O'Neil v. Hilton Head Hosp., 115 F.3d 272 (4th Cir. 1997) (upholding post-hire mutual arbitration agreement between employee and multistate employer)
Westmoreland v. High Point Healthcare, Inc., 721 S.E.2d 712 (N.C. Ct. App. 2012) (standards for unconscionability and burden on party asserting it)