534 S.W.3d 902
Mo. Ct. App.2017Background
- Stephanie Wilder was hired by Youngblood Nissan in January 2015; on her first day she and an employer representative signed an "Agreement for Binding Arbitration."
- Wilder worked in various positions and was terminated in September 2016; she sued in February 2017 for wrongful termination in violation of Missouri public policy (whistleblowing re: alleged wire fraud).
- Youngblood moved to compel arbitration and filed an AAA demand; Wilder opposed, arguing the arbitration agreement lacked consideration, was unconscionable, and she was pressured to sign.
- The arbitration agreement made arbitration a condition of at‑will employment but carved out certain employer claims (e.g., trade secrets, injunctive relief) for court litigation and exempted statutorily non‑arbitrable claims (workers’ comp, unemployment).
- The trial court denied the motion to compel, finding at‑will employment insufficient consideration and that the agreement lacked mutuality because the employer could litigate some claims in court while the employee was bound to arbitrate.
- On appeal, the court affirmed: under Missouri contract law (as applied consistent with FAA precedent), the arbitration agreement was unenforceable for lack of mutual consideration and mutuality; the court declined to recast state law to favor arbitration beyond existing precedent.
Issues
| Issue | Wilder's Argument (Plaintiff) | Youngblood's Argument (Defendant) | Held |
|---|---|---|---|
| Whether the arbitration agreement is supported by consideration | Agreement is unsupported by consideration because employment was at‑will and the clause is one‑sided; also unconscionable due to pressured signing | At‑will employment (offer/continuation) and employer promises (e.g., pay arbitration fees) constitute consideration and mutuality; continued employment/performance also supports contract | Denied: at‑will employment alone is insufficient; the agreement lacked mutuality because employer reserved court litigation for many claims, so no adequate consideration/support for arbitration clause |
| Whether federal policy/FAA requires enforcement despite state law on consideration | FAA does not override generally applicable state contract defenses; state law may invalidate arbitration clauses for lack of consideration | FAA and federal policy favor arbitration and should preempt Missouri approach that treats at‑will employment as insufficient | Denied: court applied FAA precedent permitting state‑law contract defenses (Concepcion); it refused to change Missouri contract law and declined to give federal policy effect sufficient to compel arbitration here |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA allows generally applicable state contract defenses but disallows defenses that single out arbitration)
- Eaton v. CMH Homes, Inc., 461 S.W.3d 426 (Mo. banc 2015) (lack of mutuality is a factor in unconscionability, but whole‑contract consideration can cure arbitration‑clause mutuality concerns)
- Jimenez v. Cintas Corp., 475 S.W.3d 679 (Mo. App. E.D. 2015) (at‑will employment alone insufficient consideration for arbitration clause; employer reservation to litigate can render agreement illusory)