## Facts

- In October 1991, Mary Jane Gutierrez began working for Academy Corp.
- On May 2, 1992, Gutierrez signed a document titled “Waiver, Release of Claims, Indemnification and Arbitration” in connection with Academy’s Work Related Accident Program for Academy employees.
- In exchange for receiving medical and other benefits under the program, Gutierrez agreed to submit to final and binding arbitration “any and all disputes, claims and/or disagreements” with Academy, expressly including discrimination claims such as those under Title VII and other employment statutes.
- The agreement stated it would be governed by the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.
- After Academy terminated Gutierrez’s employment, she filed suit in the U.S. District Court for the Southern District of Texas alleging violations of Title VII (including discrimination and constructive discharge allegations).
- Academy moved to stay the federal action and compel arbitration under the written arbitration agreement.
- Gutierrez opposed, arguing the arbitration clause was unconscionable. She alleged that when she asked to take the agreement home to review with her paralegal husband and consult an attorney, she was told she had to sign immediately or lose the opportunity to obtain the program’s benefits.
- Gutierrez also argued there was unequal bargaining power between her and the employer at the time she signed.

## Issues

1. Whether the FAA required enforcement of the arbitration clause covering “any and all disputes,” including Title VII discrimination claims, and thus required the court to compel arbitration and stay the litigation.
2. Whether the arbitration clause was unenforceable under generally applicable contract defenses—specifically, unconscionability—based on alleged same-day signing pressure and unequal bargaining power.

## Decision

- The court granted Academy’s motion to stay litigation and compel arbitration.
- The court held the FAA governed the arbitration agreement and required enforcement absent a valid contract defense.
- The court found Gutierrez’s Title VII claims fell within the agreement’s express, broad language requiring arbitration of discrimination disputes.
- The court rejected Gutierrez’s unconscionability challenge and ordered the parties to proceed to arbitration, staying the federal case pending arbitration.

## Legal Principles

- FAA § 2 makes written arbitration provisions “valid, irrevocable, and enforceable,” except on grounds that exist at law or in equity for revoking any contract (such as fraud, duress, or unconscionability).
- Federal law reflects a strong preference for enforcing arbitration agreements as written; when an arbitration clause is broad, close questions about coverage are generally resolved in favor of arbitration.
- Statutory employment-discrimination claims, including Title VII claims, may be resolved in arbitration when the employee agreed to arbitrate those disputes and Congress has not barred arbitration of the statute.
- Unconscionability is assessed under generally applicable state contract law; a party resisting arbitration bears the burden to show facts sufficient to invalidate the agreement.
- Telling an employee that participation in a benefits program requires signing the agreement at that time, without more, does not automatically establish procedural unfairness sufficient to void an arbitration clause.
- Inequality of bargaining power in the employment setting, standing alone, is typically not enough to render an arbitration agreement unenforceable where the terms require arbitration of both sides’ covered disputes.

## Conclusion

Gutierrez v. Academy Corp. held that an employee who signed a FAA-governed arbitration agreement as part of an employer’s work-related accident benefits program could be required to arbitrate later Title VII claims, and that allegations of same-day signing pressure and unequal bargaining power were insufficient to establish unconscionability or prevent the court from compelling arbitration and staying the federal lawsuit.


Gutierrez v. Academy Corp., 967 F. Supp. 945 (1997)