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Employment Contract and Unconscionability

The district court held that the 1997 DRRP, and not the 1998 or 2003 DRRP, applies, and that the arbitration agreement is unenforceable because it is unconscionable under Washington law. After its motion for reconsideration was denied, Circuit City appealed.
The Federal Arbitration Act (“FAA”) was enacted “to reverse the longstanding judicial hostility to arbitration agreements . . . and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 114 L. Ed. 2d 26, 111 S. Ct. 1647 (1991). The FAA applies to arbitration agreements, like the one here, that cover employment-related claims. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 149 L. Ed. 2d 234, 121 S. Ct. 1302 (2001). The FAA provides that arbitration agreements generally “shall be valid, irrevocable, and enforceable,” but courts may decline to enforce them when grounds “exist at law or in equity for the revocation of any contract.” 9 U.S.C. Section:2. “Thus, generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements without contravening” federal law. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 134 L. Ed. 2d 902, 116 S. Ct. 1652 (1996).
Accordingly, we review Al-Safin’s arbitration agreement with Circuit City in light of the “liberal federal policy favoring arbitration agreements,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983), and consider its enforceability according to the laws of the state of contract formation, see First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 131 L. Ed. 2d 985, 115 S. Ct. 1920 (1995); Ingle, 328 F.3d at 1170.

I. Law of the Case

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