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UPDATED: Transcript of Arbitration Unconscionability at the Court Today

Today's the U.S. Supreme Court tackles unconscionability in arbitration.  The transcript has been posted by the Court, and can be viewed here.

The decision in Rent-A-Center, West Inc. v. Jackson,  09-497, will determine how involved the nation's courts will be in establishing whether agreements to arbitrate stand or are litigated. 

It's a disparity-of-power case--a former employee against the large rent-to-own retail chain--that could have enormous implications for business-to-business contracts.

The Court is expected to post the transcript in the case later today; we'll link to it as soon as we see it.

The issue the Court agreed to tackle is whether a federal district court is "required in all cases to determine claims that an arbitration agreement subject to the Federal Arbitration Act ("FAA") is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this 'gateway' issue to the arbitrator for decision."

The respondent in this morning's argument is a former employee of petitioner Rent-A-Center West Inc. who alleged racial discrimination.

Antonio Jackson asked a federal district court to deny his former employer's request for arbitration; he had a clause in his employment contract.

Maintaining that the contract was unconscionable in part because the arbitration clause provided that only an arbitrator can decide the clause's validity, the Ninth U.S. Circuit Court of Appeals backed Jackson's view.  It held that where a clause is allegedly unconscionabile, a court must decide whether it's valid.

The September 2009 Ninth Circuit decision is available here.  The Court's list of proceedings, orders and participants can be found here.  The Scotusblog site's Rent-a-Center wiki containing briefs and other documents is available here.

Russ Bleemer

Editor, Alternatives