Yesterday the Fourth Circuit refused to enforce the arbitration agreement in a Western Sky payday loan agreement in the case Hayes v. Delbert Services Corp. The Court’s holding is an important reminder that despite the current anti-consumer state of the law on arbitration agreements, these clauses are not invitations to companies to imagine new and exciting ways to strip consumers of their substantive rights.
The Court’s holding on both the issue of the agreements purported waiver of rights as well as severability is instructive on the kinds of challenges that can be brought against unconscionable arbitration agreements.