Circuit City Stores, Inc., a Virginia Corporation v. Paul Mantor, an Individual

Paul Mantor appeals from the district court’s grant of Circuit City Stores, Inc’s (Circuit City) motion to compel arbitration. Mantor argues on appeal that Circuit City’s arbitration agreement is unenforceable under California law of unconscionability. We agree and therefore reverse and remand.

Facts and Procedural Background

Paul Mantor worked for Circuit City from August 1992 until October 2000, when Circuit City terminated his employment. When Circuit City hired Mantor, it had no arbitration program. In 1995, Circuit City implemented an arbitration program called the “Associate Issue Resolution Program” (AIRP). Circuit City emphasized to managers the importance of full participation in the AIRP, claiming that the company had been losing money because of lawsuits filed by employees. Circuit City management stressed that employees had little choice in this matter; they suggested that employees ought to sign the agreement or prepare to be terminated. Although Circuit City .circulated the forms regarding the AIRP in 1995, Mantor was able to avoid either signing up or openly refusing to participate in the AIRP for three years. In 1998, Circuit City District Manager Brad…