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Rent-A-Center v. Jackson | 561 U.S. 63, 130 S. Ct. 2772 (2010)

Contract defenses, such as fraud, duress, and unconscionability, can invalidate an agreement. They might also provide a claimant with a way out of arbitration. If the arbitration agreement is unenforceable, a claimant can pursue his claim in court.

But who gets to decide whether there’s a valid contract defense to an arbitration agreement? In Rent-A-Center versus Jackson, the parties square off over whether the arbitrator or the court decides questions of the arbitration agreement’s enforceability.

Rent-A-Center hired Antonio Jackson. As a condition of employment, Jackson agreed to arbitrate claims against Rent-A-Center. Jackson signed a contract containing two agreements to arbitrate. First, the parties agreed to arbitrate all disputes arising out of their employment relationship. Second, in a section called the delegation provision, the agreement specified that the arbitrator, not a court, would decide whether the agreement was enforceable.

Jackson later sued Rent-A-Center for employment discrimination in federal district court. Rent-A-Center moved to compel arbitration according to the Federal Arbitration Act.

Jackson resisted arbitration, claiming that the arbitration agreement was unconscionable under state law. Rent-A-Center responded that the agreement’s delegation provision committed questions of enforceability to the arbitrator, not the court.

The district court granted the motion to compel arbitration, reasoning that the agreement delegated the threshold question of unconscionability to the arbitrator. The Ninth Circuit reversed in part, reasoning that unconscionability must be decided by a court. The Supreme Court granted cert.

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