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So long as there as there is a valid agreement to arbitrate with mutuality of obligation, an arbitration contract that excepts an employer's equitable claims is "not so inherently unfair and one-sided as to render the arbitration agreement unenforceable on unconscionability grounds," according to a federal district court in West Virginia.
In Captain D's, LLC v. McClenathan, No. Civ. A. 2:06-0261, 2006 WL 3409757 (S.D.W. Va. Nov. 27, 2006), McClenathan sued his former employer, Captain D's, for alleged age discrimination. Captain D's filed a petition to compel arbitration based on an Employee Dispute Resolution Plan (EDR Plan).
In opposing arbitration, McClenathan argued that there was inadequate consideration for the arbitration agreement because he remained an "at will" employee. The Court found this argument could be "disposed of summarily inasmuch as it is well established that an employer's agreement to be bound by the arbitration process constitutes sufficient consideration to support an agreement to arbitrate an employee's claims."
McClenathan also argued that a provision allowing Captain D's to seek "equitable relief" in court constituted a lack of mutuality that rendered the arbitration agreement unenforceable. In rejecting this argument, the Court reasoned that the mutuality requirement means only that both parties must be bound by the arbitration process, not that they must agree to arbitrate agree every conceivable dispute. Moreover, as the Court noted, the arbitration agreement also provided an exception for an employee's claim for worker's compensation or unemployment benefits.
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