Imagine this. You’ve just been offered your dream job at a major company with offices here in Pittsburgh. The HR coordinator sends you a welcome email with a link to an electronic onboarding portal. You click through screen after screen - tax forms, direct deposit, emergency contacts, an employee handbook you’ll read later. Somewhere in the middle of it all, sandwiched between a benefits enrollment form and a parking garage authorization, there is a dense block of legal text requiring you to submit any future disputes to binding arbitration. You have five minutes before the next orientation session starts. You click “Accept.”
Six months later, your supervisor fires you because you reported sexual harassment - or because you asked for a disability accommodation -or because of your race, your age, your pregnancy or something else protected by law. You call a lawyer. And the first thing that lawyer tells you is that your employer is going to try to force you out of court and into a private arbitration proceeding that the company designed, the company controls, and the company knows inside and out.
Here in Allegheny County and across Western Pennsylvania, we see this story with increasing frequency. Many employers are burying mandatory arbitration clauses deep inside their onboarding paperwork, banking on the reality that no new hire is going to push back on day one. But the law does not reward that kind of gamesmanship. Courts across the country have developed a robust body of law holding that arbitration agreements can be struck down when they are unconscionable.
This blog explains what that means and why you should not assume a forced arbitration clause is bulletproof.
THE DOCTRINE OF UNCONSCIONABILITY: A SLIDING SCALE, NOT AN ON/OFF SWITCH
The law evaluates the fairness of an arbitration agreement through two lenses: procedural unconscionability and substantive unconscionability. Think of it as a sliding scale. Both elements must be present, but they do not need to exist in equal measure. A contract that is overwhelmingly procedurally unconscionable (meaning the process by which it was formed was deeply unfair) requires less evidence that its actual terms are one-sided. Conversely, if the terms themselves are staggeringly one-sided or oppressive, the court will require less proof that the signing process was flawed.
That sliding scale is critically important for employees here in Pittsburgh, because the typical onboarding experience at a large employer virtually guarantees at least some degree of procedural unconscionability. The question, then, is whether the employer overreached on the substance - and in our experience, they very often do.
HOW THE AGREEMENT WAS FORMED: THE PROCEDURAL PROBLEM
Procedural unconscionability focuses on the circumstances surrounding the contract’s formation - the oppression and surprise that arise from unequal bargaining power. Courts are particularly attuned to these dynamics in the employment setting, where the economic pressure on job applicants can be acute. An employee who needs a paycheck is in no position to negotiate the fine print of a 29-page dispute resolution manual.
The hallmarks of procedural unconscionability are familiar to anyone who has started a new job in the last decade. The agreement is presented on a take-it-or-leave-it basis, often buried inside an electronic onboarding system alongside dozens of other documents. The new hire is told that continued employment depends on clicking “Accept.” No one explains what the arbitration clause means. No one offers a chance to negotiate. When the employer gives a new hire five minutes to review an entire packet of legal documents and pressures them to hurry signing it, the procedural unfairness speaks for itself.
But the procedural problems often run deeper than the signing ceremony. Some employers refuse to identify the arbitration provider. Others incorporate outside rules by reference - saying the arbitration will follow a particular organization’s procedures - without ever telling the employee which set of rules applies, where to find them, or even which organization will conduct the proceedings. When an employer keeps the identity of the decision-maker secret, reserving for itself the unilateral right to swap providers at any time, that is not an arbitration agreement. That is a trap.
THE TERMS THEMSELVES: WHERE EMPLOYERS OVERREACH
Substantive unconscionability is where most arbitration agreements fall apart. Courts scrutinize the actual terms of the agreement to determine whether they are unreasonably favorable to the employer, i.e., so one-sided that they “shock the conscience.” Here are the most common defects we encounter in our Pittsburgh practice:
Lack of mutuality. Perhaps the single most devastating attack on an arbitration agreement is showing that it is not truly bilateral. Many employers require employees to arbitrate discrimination, harassment, retaliation and wrongful termination claims - the claims workers are most likely to bring - while exempting from arbitration claims that the employer is most likely to pursue against the worker, such as trade secret violations, non-compete violations and other claims for injunctive relief. When the agreement channels the employee’s claims into a private forum but preserves the employer’s right to go to court, the lack of mutuality is a textbook example of substantive unconscionability.
Discovery limitations. Arbitration agreements frequently restrict the number of depositions, interrogatories and document requests an employee can serve. Some cap depositions at two or three. Others limit document requests to 15 or 20. For a discrimination case, where the critical evidence almost always resides in the employer’s files, email servers and management offices, these restrictions can be devastating. Courts have repeatedly held that discovery limitations that prevent an employee from adequately vindicating statutory rights can render an arbitration agreement unconscionable.
Hearing limitations. These provisions limit the arbitration hearing to a certain amount of time such as 2 days. Such limitations are grossly adverse to the plaintiff in an employment discrimination case because proving the claim often requires multiple witnesses to testify and the introduction of many documents.
Traveling to a distant forum. Some arbitration agreements say that the arbitration must take place in a particular location, even if that location is hundreds and hundreds of miles from where the employee lived and worked.
Shortened filing deadlines. Some agreements require employees to initiate arbitration within a period shorter than the applicable statute of limitations, or, worse, require the employee to file with the arbitration forum within the time she would have had to file an administrative charge, effectively stripping her of the right to an agency investigation before having to pursue her claim. These accelerated deadlines serve no purpose other than to make it harder for employees to bring claims.
Fee-shifting and cost provisions. Under federal and state anti-discrimination statutes, a prevailing employee is entitled to recover attorney fees and costs from the employer. Many arbitration agreements attempt to override this one-way fee-shifting by requiring each party to bear its own fees, or by authorizing the employer to recover fees if it successfully compels arbitration. One major employer’s agreement even provided that an employee who resisted arbitration and lost would have to pay the company’s legal costs for bringing the motion to compel. These provisions are not just unconscionable, they are designed to chill employees from ever challenging the agreement in the first place.
Confidentiality requirements. An employee who signs a confidentiality provision in an arbitration agreement may be prohibited from discussing the proceedings or the outcome. While employers claim these provisions serve legitimate commercial interests, the practical effect is to give the employer - a “repeat player” in arbitration - an enormous informational advantage. The employer knows the tendencies of various arbitrators, the outcomes of past disputes and the strategies that work. The employee is left in the dark, forced to navigate an unfamiliar process without the benefit of knowledge that other employees might share. When the employer cannot articulate any legitimate business reason for secrecy, confidentiality provisions add to the overall unconscionability of the agreement.
WHEN THE WHOLE AGREEMENT FALLS: THE SEVERANCE QUESTION
When a court finds multiple unconscionable provisions in an arbitration agreement, the employer will inevitably argue that the court should simply strike the offending clauses and enforce the rest. Courts have the discretion to sever unconscionable terms, but they also have the discretion to refuse severance.
The analysis turns on three questions: whether the unconscionable provisions are collateral to the agreement’s main purpose; whether it is possible to cure the problem through severance alone; and whether enforcing the remainder would serve the interests of justice. When an agreement contains multiple defective provisions, courts recognize a pattern. That pattern tells the court that the agreement was not drafted as a fair alternative to litigation but as a systematic effort to impose a forum that works to the employer’s advantage. Severing each unconscionable provision but otherwise compelling arbitration would simply reward the employer for its overreach and create a perverse incentive: draft the most one-sided agreement possible, knowing that the worst case scenario is that a court will edit it down to something enforceable.
WHAT THIS MEANS FOR PITTSBURGH WORKERS
If you are an employee in Pittsburgh or anywhere in Western Pennsylvania who has been terminated, harassed, discriminated against or retaliated against, and you signed an arbitration agreement, do not give up. The fact that you signed the agreement does not end the inquiry. It begins it.
The question is not whether you signed. The question is whether the agreement is enforceable. And to answer that question, an experienced employment lawyer will examine the circumstances under which you signed, how the agreement was presented, what you were told, how much time you had to review it and whether you had any meaningful opportunity to negotiate. Your lawyer will then dissect the agreement itself, provision by provision, looking for the kinds of one-sided terms that courts have repeatedly struck down: lack of mutuality, discovery restrictions, shortened deadlines, improper fee-shifting, secret arbitration providers and confidentiality provisions that serve no purpose other than to protect the employer.
For claims involving sexual assault or sexual harassment, federal law now provides an additional layer of protection. Congress enacted legislation voiding pre-dispute arbitration clauses in cases involving sexual harassment and sexual assault - a historic change that ensures survivors can tell their stories in open court rather than behind closed doors.
At the Lamberton Law Firm, we have spent more than 25 years representing employees throughout the Pittsburgh region in discrimination, harassment, retaliation and wrongful termination cases. We have seen a variety of forced arbitration agreements, and we know how to challenge them. If your employer is trying to push you into arbitration, contact us. The agreement you signed on your first day of work may not be worth the paper it was written on.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. If you believe your rights have been violated, contact an experienced employment attorney to discuss your specific situation.