Mitchell v. HCL America

Margaret Mitchell (plaintiff) brought an employment-discrimination lawsuit against her employer, HCL America, Inc. (HCL) (defendant). The terms of Mitchell’s employment with HCL were governed by a written employment agreement that included an arbitration clause. Before accepting HCL’s offer of employment, Mitchell objected to the arbitration clause, but HCL told her that the clause was standard and that she could take the offer of employment or leave it. Mitchell then signed the employment agreement, accepted the arbitration clause, and relocated from Colorado to North Carolina to begin working for HCL. The arbitration clause required all claims arising out of the agreement or Mitchell’s employment to be submitted to arbitration in Sunnyvale, California, where HCL was headquartered, except for claims arising from a second agreement called Undertaking (undertakings clause). The undertakings clause primarily covered intellectual-property claims that would more likely be brought by HCL than by Mitchell. In other words, HCL reserved the right to litigate, not arbitrate, the types of claims it would be most likely to assert. The arbitration clause also required Mitchell to split the costs of arbitration with HCL. HCL filed a motion to compel Mitchell to arbitrate her dispute and to stay the district-court proceedings pending arbitration. Mitchell argued that the arbitration clause was unenforceable because (1) the undertakings clause lacked mutuality, (2) the cost-sharing agreement was unconscionable, and (3) the arbitral forum-selection clause unfairly benefited HCL.