Yufan Zhang v. Unitedhealth Group, 367 F. Supp. 3d 910

Plaintiff, a senior developer, worked at UnitedHealth from Dec 2014 to Nov 14, 2016 and alleges age-based mistreatment and termination by his supervisor (including restricted resources, unrealistic assignments, exaggerated mistakes).
Plaintiff filed an MDHR/EEOC charge alleging age discrimination and received a Notice of Right to Sue; he later filed suit asserting ADEA, MHRA, and defamation claims.
UnitedHealth provided an offer letter and an Employment Arbitration Policy (Policy) before hire; the offer stated continued employment constituted acceptance of the Policy.
The Policy requires arbitration of employment-related disputes (including ADEA, state discrimination and defamation claims) and contains a unilateral-modification clause (30 days’ notice, written amendments effective Jan 1) plus an arbitrator-controlled discovery provision.
UnitedHealth moved to compel arbitration; the Court evaluated (1) whether a valid arbitration agreement existed and (2) whether the claims fell within its scope.
The Court granted the motion to compel arbitration and stayed the action pending arbitration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claims fall within Policy scope	Claims arise from employment but Plaintiff argued procedural problems may avoid arbitration	Policy expressly covers disputes arising from or relating to employment, including ADEA, MHRA, defamation	Held: Claims fall within Policy scope and are arbitrable
Whether a valid arbitration contract was formed	Policy invalid because unilateral modification makes it illusory	Offer+Policy before hire and continued employment is consideration; modification is limited and prospective	Held: Valid contract formed when employment began; modification clause not illusory
Whether unilateral-modification clause renders Policy unenforceable	Clause gives employer arbitrary power to change terms and avoid obligations	Clause is limited (written changes, 30 days’ notice, effective Jan 1, amendments not applied to claims already arisen); Minnesota law allows such modifications with implied good-faith limitation	Held: Clause does not render Policy invalid
Whether the Policy is procedurally or substantively unconscionable	Plaintiff cites unequal bargaining power, lack of provided AAA rules, limited discovery provisions	Employer provided 21 days before acceptance; AAA rules are publicly available; discovery limits delegated to arbitrator	Held: Not unconscionable; discovery/other procedural objections to be decided by arbitrator first

Keymer v. Management Recruiters Int'l, Inc., 169 F.3d 501 (8th Cir.) (standard for determining existence and scope of arbitration agreement)
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S.) (arbitration covers disputes parties agreed to submit)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S.) (state contract law governs formation questions respecting arbitration agreements)
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (U.S.) (inequality of bargaining power alone does not invalidate arbitration agreements)
Grouse v. Group Health Plan, Inc., 306 N.W.2d 114 (Minn.) (contracts may be illusory where parties retain bilateral termination power)
Pershern v. Fiatallis N. Am., Inc., 834 F.2d 136 (8th Cir.) (Minnesota law permits modification of at-will employment agreements)
Residential Funding Co. v. Terrace Mortg. Co., 725 F.3d 910 (8th Cir.) (recognizing implied covenant of good faith in certain contractual contexts)
Gannon v. Circuit City Stores, Inc., 262 F.3d 677 (8th Cir.) (arbitrator may determine procedural issues like discovery)
Wold v. Dell Fin. Servs., 598 F. Supp. 2d 984 (D. Minn.) (standard for unconscionability review under Minnesota law)
Siebert v. Amateur Athletic Union of the United States, Inc., 422 F. Supp. 2d 1033 (D. Minn.) (delegation of certain contract-validity issues to arbitrator)