IAP Worldwide Services, VI, Inc., 368 F.3d 269, 284–85, 93 FEP Cases 1483 (3d Cir. 2004), reversed an order denying defendant’s motion to compel arbitration. The court held that the “loser pays” provision of the agreement could not be found unconscionable on the present record. “Parilla has submitted no evidence of the potential costs of arbitration or of her inability to pay those costs. It is undisputed, however, that Parilla did not have the opportunity to present such evidence because the District Court declined to entertain her argument regarding the enforceability of the ‘loser pays’ provision. Accordingly, we will remand this matter to the District Court for the development of a record on, and a determination of, the issue of whether the reasonably anticipatable fees and expenses of the arbitrator and Parilla’s financial circumstances are such that the prospect of her having to pay them in the event she loses unduly burdens her right to seek relief.” 
	Faber v. Menard, Inc., 367 F.3d 1048, 93 FEP Cases 1730 (8th Cir. 2004), reversed the denial of defendant’s motion to compel arbitration, “with directions that the district court determine whether the requirement that Faber pay the arbitrators’ fees in the circumstances, unconscionably prevents his access to the arbitral forum. If found to be unconscionable, the offending clause should be severed and arbitration compelled.” 
	Faber failed to meet his burden of proof that the arbitrators’ fees make the agreement unconscionable due to their prohibitive cost. The amount of the arbitrator’s fees is not well-defined in the contract, and Faber has not provided the evidence necessary to estimate the length of the arbitration and the corresponding amount of arbitrators’ fees (e.g. sophistication of the issues, average daily or hourly arbitrator costs in the region). He has also failed to provide evidence of his particular financial situation. Rather, Faber merely argues that the requirement that he pay half of the arbitrators’ fees is unconscionable because it is a cost he would not pay in litigation and therefore discourages him from bringing his claims. Without the specific evidence, however, this hypothetical discouragement is purely speculative. . . . Accordingly, because there is insufficient information in the record on this question, we must remand for a determination of this issue. On remand, the district court may further develop the record and consider whether Faber can meet the high threshold of proving that the clause requiring him to pay arbitrators’ fees prevents him from being able to raise his claims in arbitration.
Id. at 1054 (citations omitted). 
Unconscionability 
	Parilla v. IAP Worldwide Services, VI, Inc., 368 F.3d 269, 277–89, 93 FEP Cases 1483 (3d Cir. 2004), reversed an order denying defendant’s motion to compel arbitration. The court held that the arbitration agreement was unconscionable in requiring notice of the claim within thirty days, on pain of loss of all rights. The court also held that the provision in the agreement waiving attorneys’ fees, costs, and expenses was unconscionable as to both Title VII and Virgin Islands claims because of the greater financial resources of the defendant. It held that the confidentiality provision was not unconscionable because it made the task of future litigants more difficult, not the task of plaintiffs. It held that the non-residency requirement—that the arbitrators not live on the Virgin Islands or Puerto Rico—was not unconscionable. The court held that employers’ after-the-fact offers to cure the unconscionable provisions should not be taken into account, because the provisions could deter employees from asserting claims. Such provisions are unenforceable. The court remanded the issue whether the unconscionable provisions could be severed.
Unconscionability as to Choice of Law
	Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370, 377–78, 10 WH Cases 2d 609 (6th Cir. 2005), affirmed the district court’s denial of defendant’s motion to compel arbitration. The agreement applied to all facilities in all states. Defendant argued that Tennessee law on unconscionability could not be applied to persons who worked outside of Tennessee. The court stated that there are potential Constitutional limitations on the application of one State’s law in other States, where the chosen law conflicts with the law of other States, but that Ryan’s had not shown any relevant conflict between Tennessee law and the law of other states.
Unconscionability as to Discovery Rights
	Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370, 387, 10 WH Cases 2d 609 (6th Cir. 2005), affirmed the district court’s denial of defendant’s motion to compel arbitration. The court held that the limitation of one deposition per side, with any additional discovery subject to the control of a possibly biased panel, did not allow employees to vindicate their rights effectively.
Consideration 
	Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370, 10 WH Cases 2d 609 (6th Cir. 2005), affirmed the district court’s denial of defendant’s motion to compel arbitration, in part because there was no consideration. The arbitration services provider, EDSI, reserved the right to amend its rules from time to time. A previous case had held that this rendered EDSI’s promise to provide arbitration services fatally indefinite. EDSI amended its rules to state that an employee could choose to have his or her claim arbitrated under the old rules or the new rules. The court held that this did not cure the defect because the arbitration agreements said that they could not be changed without a new agreement signed by EDSI and the employee, and none of them had signed new agreements. “Although the 2000 version of the rules purport to afford Plaintiffs the right to enforce the rules in effect at the time of execution, Plaintiffs’ agreements do not incorporate that right.” Id. at 375. The court emphasized the problems of lack of consideration flowing from the fact that employees’ agreements were with the arbitration services provider, not with Ryan’s:
	Adequate consideration cannot take the form of Ryan’s promise to submit any claims it may have against Plaintiffs to EDSI’s arbitral forum. As explained by one district court: 
	EDSI is bound by its promise to Plaintiffs only to the extent that Ryan’s is bound to submit to the forum, for without Ryan’s consent EDSI can provide no benefit to Plaintiffs. EDSI/Ryan’s Contract contains an escape clause whereby Ryan’s can cancel its Contract with EDSI on ten days notice.. This provision stands in clear contrast to the mutual termination clause found in the Arbitration Agreement, thus negating any consideration that Plaintiffs might be deemed to receive from EDSI’s promise to provide the forum. Similarly, the ten-day escape clause eliminates consideration that might otherwise exist or flow from Plaintiffs’ “third-party beneficiary” status, as alluded to in the Arbitration Agreement.
. . . Indeed, we question whether the agreement between EDSI and Ryan’s even obligates Ryan’s to submit to EDSI’s arbitral forum at all. The EDSI/Ryan’s agreement merely obligates EDSI (for a fee from Ryan’s) to “[a]dminister and provide access to the EDSI alternative dispute resolution procedures and forum for all Company job applicants, employees, and the Company itself, as provided in the EDSI Rules and Procedures.” (J.A. 1758.) (emphasis added). Notably, the agreement does not require Ryan’s to submit its employment claims to the EDSI forum.
Id. at 380 (citation omitted).
Unilateral Power to Pick the Panel from Which Arbitrators Are Chosen 
	Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370, 10 WH Cases 2d 609 (6th Cir. 2005), affirmed the district court’s denial of defendant’s motion to compel arbitration, in large part because defendant accounted for 42% of the income of Employment Dispute Services, Inc. (“EDSI”), the for-profit arbitration services provider, and the indicia that two of the arbitrators come from potentially biased pools of persons associated with EDSI. The pools, each of which contributes one arbitrator to the panel, are: “(1) supervisors or managers of an employer signatory to an agreement with EDSI; (2) employees who are non-exempt from the wage and hour protections of the Fair Labor Standards Act; and (3) attorneys, retired judges, or other competent legal professional persons not associated with either party.” Id. at 387. The court continued:
	The bias is exacerbated by the lack of a protocol governing EDSI’s selection of potential adjudicators from the three pools. The individuals in the supervisor and employee pools are neither randomly selected nor chosen by a disinterested person for their skills. Instead, all members of these two pools are chosen by the small number of employers who, like Ryan’s, have signed alternative dispute resolution agreements with EDSI: Golden Corral Steak Houses, K & W Cafeterias, Papa John’s Pizza, Sticky Fingers Restaurants, The Cliffs at Glass, Inc., and Wieland Investments, Inc. In addition, the rules do not prevent a supervisor of a signatory company from sitting on an adjudication panel with a non-supervisory employee from the same company, including someone whom the supervisor directly supervises. Further, EDSI has no policy in place that prohibits a signatory company from discussing the arbitration process or specific claims with its employee adjudicators or from attempting to improperly influence its employee adjudicators.
Id. 
Bars to Actions
Do EEOC Lawsuits Bar Private Actions?
	EEOC v. Pemco Aeroplex, Inc., 383 F.3d 1280, 94 FEP Cases 848 (11th Cir. 2004), reversed the grant of summary judgment to the Title VII racial harassment defendant, holding that the EEOC was not in privity with private plaintiffs and was not bound by res judicata or by collateral estoppel by the judgment for defendant in that case. The EEOC had brought suit on behalf of persons not involved in the earlier case, and had twice unsuccessfully sought to consolidate its case with the earlier case. 
Ripeness 
	Wyatt, Virgin Islands, Inc. v. Government of the Virgin Islands, 385 F.3d 801, 21 IER Cases 1583 (3d Cir. 2004), reversed the grant of declaratory judgment to the plaintiff employer that its mandatory arbitration agreements with employees were enforceable. Defendant had issued cease-and-desist letters to plaintiff as to this requirement, but had done nothing further. The court held that the action was unripe.
Enforcement of Settlement Agreements  
	Sims-Madison v. Inland Paperboard and Packaging, Inc., 379 F.3d 445, 94 FEP Cases 545 (7th Cir. 2004), reversed the lower court’s sua sponte enforcement of a settlement agreement, because defendant had relied on the agreement only to establish the affirmative defense of accord and satisfaction, and plaintiff was never on notice that the agreement might be enforced. Defendant had relied on the agreement to fire the plaintiff. The court stated that sua sponte judgments are disfavored. Plaintiff’s counsel agreed with defendant to settle the case for $30,000, with several commitments including the withdrawal of plaintiff’s arbitration over her termination. Plaintiff stated that she had never authorized an offer that included the withdrawal of her arbitration. She refused to sign the agreement and defendant accordingly refused to pay the $30,000. The court held that defendant’s failure to pay defeated its defense of accord and satisfaction, because actual payment was essential to the defense. 
	Chavez v. State of New Mexico, 397 F.3d 826, 831, 95 FEP Cases 434 (10th Cir. 2005), affirmed the lower court’s denial of plaintiffs’ motion