Wilks v. Pep Boys

Rosann Wilks and other individuals (employees) (plaintiffs) were employees of Pep Boys (defendant). The employees each signed arbitration agreements upon hiring, but due to periodic modifications made by Pep Boys, the employees individually signed different versions of the agreement. Every version of the agreement stated that any employment dispute would be arbitrated. Some versions stated that the arbitration would be governed by the rules of the American Arbitration Association (association), and others incorporated the rules of the Judicial Arbitration and Mediation Services/Endispute (Judicial). The discovery provision of the agreement stated that each arbitration party could take the deposition of one individual in addition to the opposing party’s expert witnesses. Document production could also be compelled, but any additional discovery would be allowed only with the arbitrator’s approval and a showing of substantial need. A dispute arose between the employees and Pep Boys under the Fair Labor Standards Act (FLSA), and the employees filed suit in federal district court. Pep Boys filed a motion to dismiss or stay the proceedings and compel arbitration, citing the arbitration agreement. Among other arguments, the employees claimed that the arbitration agreement was unenforceable because the discovery terms were one-sided in favor of Pep Boys and therefore unconscionable. The employees argued that Pep Boys would be able to successfully proceed with only one deposition per arbitration in compliance with the terms. However, the employees would each need to depose several managers and supervisors to prove their claims, and they could not conduct multiple depositions under the agreement. The court addressed and dismissed the employees’ other arguments and addressed the discovery provision.