MAPP v. Floor and Decor: Unenforceable Adhesionary Arbitration Clause

This case from the Fifth Circuit Court of Appeals details a dispute between Floor and Decor Outlets of America and its former contractor, MAPP, L.L.C. The central conflict involves the retailer's attempt to compel arbitration following a contract termination and a subsequent three-million-dollar demand from the contractor. While a lower court initially blocked arbitration because the retailer skipped required mediation steps, the appellate court reached the same conclusion using a different legal theory. The judges determined that the arbitration clause was adhesionary and unenforceable under Louisiana law because it granted the retailer unilateral power to choose arbitration while denying the same right to the contractor. By applying a four-factor test, the court found that the lack of mutuality and the unequal bargaining positions of the parties rendered the agreement invalid. Ultimately, the court affirmed the decision to deny arbitration, allowing the contractor to continue its lawsuit in federal court.