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Ruling that an employer's arbitration agreement both limited available remedies and lacked mutuality, the Ohio Court of Appeals found the agreement substantively unconscionable but remanded the case for a hearing to determine procedural unconscionability.
In Post v. ProCare Automotive Service Solutions, No. 87646, 2007 WL 1290091 (Ohio Ct. App. May 3, 2007), ProCare Automotive Solutions (ProCare) was sued for wrongful termination by six former employees. One of them, Anderson, had recently signed a new contract offering him a raise and bonus opportunities. The contract contained an arbitration agreement.
ProCare filed a motion to compel arbitration of Anderson's claims. In opposing the motion, Anderson argued that the arbitration agreement was unconscionable. The trial court denied the motion.
On appeal, the Court found that the arbitration agreement was substantively unconscionable for two reasons. First, the agreement required Anderson to pay all of his own legal expenses, but Ohio law on employment discrimination allows prevailing plaintiffs to recover attorney fees. Second, the agreement lacked mutuality because it allowed ProCare to have some claims – relating to alleged violations of confidentiality rules – heard in court, while all of Anderson's employment claims were subject to arbitration.
Turning to the issue of procedural unconscionability, the Court found that the record did not contain sufficient evidence to address the circumstances of the transaction, mainly because the trial court did not hold a hearing on the validity of the arbitration agreement. Accordingly, the Court remanded the case for a hearing to determine whether the agreement was also procedurally unconscionable.
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