## Facts

- Lisa Seawright worked for American General Financial Services and related entities from 1978 until her termination in April 2005.
- In 1999, the employer implemented an Employee Dispute Resolution (EDR) Program, effective June 1, 1999, described as the exclusive means to resolve employment-related disputes and to replace a court trial with arbitration (subject to any legal limits).
- The employer provided notice through a home office bulletin, mailed letters, an informational brochure, and employee meetings.
- The materials stated that seeking, accepting, or continuing employment would constitute agreement to use the EDR process instead of the court system for employment-related claims.
- Seawright attended at least one meeting, signed an attendance sheet acknowledging attendance and receipt of materials, and continued working for roughly six years after the program became effective.
- After termination, Seawright filed suit alleging violations of Tennessee antidiscrimination law and the Family and Medical Leave Act.
- The employer moved to compel arbitration under the Federal Arbitration Act (FAA); Seawright argued lack of assent, lack of consideration, illusoriness, unconscionability/adhesion, and no signed written agreement.

## Issues

1. Whether Seawright formed an enforceable agreement to arbitrate by continuing employment after receiving notice that continued employment constituted acceptance of the EDR Program.
2. Whether the EDR Program was supported by consideration and was non-illusory under Tennessee contract law.
3. Whether the arbitration agreement was unenforceable as unconscionable or as a contract of adhesion under Tennessee law.
4. Whether the FAA’s “written” requirement demands a signed arbitration agreement.

## Decision

- The Sixth Circuit reversed the district court’s denial of the motion to compel arbitration.
- The court held Seawright accepted the arbitration agreement by knowingly continuing employment after the program’s effective date with notice that continued employment meant agreement.
- The court found adequate consideration in the parties’ mutual obligations to arbitrate and rejected the claim that the employer’s promises were illusory.
- The court rejected unconscionability/adhesion challenges, finding insufficient evidence of oppressive surprise or substantively harsh, one-sided terms.
- The court held the FAA does not require an employee’s signature where the arbitration provision is in writing and state law permits acceptance by conduct.
- The case was remanded with instructions to compel arbitration and stay the litigation.

## Legal Principles

- Under Tennessee law, objective manifestation of assent can be shown by conduct; continued employment after notice of an arbitration program may constitute acceptance when the program clearly conditions employment on assent.
- Mutual promises to arbitrate can supply consideration for an arbitration agreement; employer obligations that bind the employer (including for specified post-termination periods or pre-termination disputes) support enforceability and defeat “illusory promise” arguments.
- Adhesion is not a categorical bar; Tennessee unconscionability analysis requires a showing of procedural oppression or substantive unfairness sufficient to render the agreement unenforceable.
- The FAA requires an arbitration agreement to be “in writing,” but does not impose a signature requirement if a written arbitration term exists and state contract law recognizes formation without signature.

## Conclusion

The Sixth Circuit compelled arbitration because the employer’s written EDR Program, communicated through multiple notices and expressly accepted through Seawright’s continued employment, created an enforceable arbitration agreement supported by consideration, not unconscionable under Tennessee law, and compliant with the FAA’s writing requirement despite the absence of a signed arbitration contract.


Seawright v. Am. Gen. Fin. Servs., Inc., 507 F.3d 967 (6th Cir. 2007)