Morrison v. Circuit City Stores

Lillian Morrison (plaintiff) was a manager at a Circuit City (defendant) store in Cincinnati, Ohio. When she applied, Morrison was required to sign a dispute-resolution agreement, which contained an arbitration clause. The arbitration clause provided that all disputes arising out of Circuit City employment would be resolved through arbitration. Another provision of the agreement stated that Circuit City would advance all costs for the arbitration, but that the costs would later be split between the parties at the conclusion of the arbitration. However, the arbitrator could force the losing party to pay the full costs. All costs had to be paid within 90 calendar days of the arbitration award being issued. If an employee was able to fully and timely pay the costs, the amount would be limited to either $500 or 3 percent of the employee’s annual compensation, whichever was greater. If an employee was unable to pay, she would owe the full amount, and Circuit City reserved the right to take from the employee’s paycheck each pay period to satisfy the obligation. Morrison was eventually terminated and filed suit in federal district court, alleging several grounds for relief related to her termination. Circuit City filed a motion to stay the proceedings under the Federal Arbitration Act. The district court granted the motion, and Morrison appealed to the United States Court of Appeals for the Sixth Circuit. The court of appeals consolidated Morrison’s case with a similar case with nearly identical circumstances. Morrison argued that the cost-splitting provisions of the arbitration agreement effectively denied her from pursuing her claims.