In Gavin v. Lady Jane’s Haircuts for Men Holding Co. (6th Cir., No. No. 24-1509, 4/23/2025), a group of hair stylists sued their employer for overtime wages under the FLSA, asserting they had been misclassified as independent contractors. The parties had an arbitration agreement which provided the AAA Commercial Rules applied, which required the costs of the arbitration be allocated equally (as opposed to the AAA Employment Rules). The agreement also had a severability clause. The trial court held the agreement was unenforceable as unconscionably costly, severed that portion, and enforced the rest of the arbitration agreement using AAA’s Employment Rules. The Sixth Circuit affirmed and compelled arbitration.
Sixth Circuit – Severability Clause Means Everything in Arbitration Agreement
