Law School Case Briefs

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Mitchell v. HCL America, Inc.

District Court, E.D. North Carolina (2016) | 2016 WL 3129176; 190 F. Supp. 3d 477; 2016 U.S. Dist. LEXIS 72011

4 min read

TL;DR: An employee challenged her mandatory arbitration agreement as unconscionable. The court found certain terms favored the employer but, rather than voiding the agreement, severed the offending clauses and compelled arbitration, holding that federal law preempted a state rule against cost-splitting.

Legal Significance: This case demonstrates the application of the "sliding scale" unconscionability doctrine to adhesion contracts and the severability of unconscionable terms. It also clarifies that the Federal Arbitration Act (FAA) preempts state-law rules that categorically prohibit cost-splitting in arbitration, distinguishing them from generally applicable contract defenses.