A federal court in Washington held that an arbitration agreement is unconscionable where it provides that only one of the parties to the agreement may refer a dispute to binding arbitration.

In Reimer v. Center for Counseling & Health Resources, No. C07-1123 MJP, 2008 WL 2782899 (W.D. Wash. July 15, 2008), Reimer sought treatment from the Center for Counseling and Health Resources (Center). Before Reimer received any treatment, she and the Center signed a contract that contained an arbitration agreement.

The agreement was governed by Washington law and provided that "any dispute concerning this agreement may be referred to binding arbitration at the sole option of The Center." After a dispute arose between the parties, the Center moved to compel arbitration. Reimer opposed, arguing that the agreement was unconscionable.

The Court denied the Center's motion to compel arbitration and held that the agreement was substantively unconscionable because it lacked mutuality. The Court noted that Washington law prohibits the enforcement of a contract when its terms are "one-sided" and "overly harsh." In applying this rule, the Court held that the arbitration agreement was one-sided and overly harsh because "it divests Ms. Reimer of any control over the forum and instead grants [the Center] full control over that decision."

The Court further explained that the agreement was substantively unconscionable because enforcement of the agreement would have allowed the Center to "dictate the forum for either party's claims," and the agreement "effectively imposes the arbitration forum on Ms. Reimer (at the choice of [the Center]) without requiring [the Center] to pursue their own claims in that forum."

In addition, the Court held that the agreement was unconscionable because it heavily favored the Center without offering any business justification for doing so. Citing Armendariz v. Foundation Health Psychcare Services, 6 P.3d 669 (Cal. 2000), the Court observed that the Center could have provided extra protection for itself in the agreement if it had a legitimate commercial need for doing so. However, the Court found no such need.