Labor & Employment Law Daily Wrap Up, ARBITRATION—6th Cir.: Dancer’s arbitration agreement with adult entertainment club was not unconscionable, (Jun 10, 2025)

By Jason Albright, J.D.

She alleged that she was “nearly naked,” and “about to start work, which she had paid for,” when she was asked to sign the agreement.

A federal district court erred in finding that an arbitration clause contained in a Lease Agreement Waiver and signed on three occasions by a dancer—who later brought putative class and collective wage claims against an adult entertainment club—was procedurally and substantively unconscionable, the Sixth Circuit held. The “fundamental flaw” in her claim of procedural unconscionability was that, by her own admission, she did not read the Lease Waiver before signing it. The agreement, supported by adequate consideration based on a “mutuality of promises,” was also not substantively unconscionable, noted the court (Hines v. National Entertainment Group, LLC, No. 24-3725 (6th Cir. Jun. 9, 2025)).

Adult entertainment club. The plaintiff, according to the appeals court, alleges that she worked as a dancer for National Entertainment Group, LLC (NEG), an adult entertainment club in Columbus, Ohio, from approximately February 2014 to August 2023.

Lease Agreement Waivers. Although NEG denies that she worked at NEG after September 2017, both parties agree that she signed three separate and identical Lease Agreement Waivers ( Lease Waivers) on October 28, 2020; January 8, 2022; and June 6, 2023.

Each Lease Waiver is a single-page document containing two paragraphs with text written in roughly 11 point font. The second paragraph is an arbitration provision and begins with the heading in all capital letters: “MANDATORY ARBITRATION AND CLASS/COLLECTIVE ACTION WAIVER.”

Arbitration clause. The arbitration provision states, in relevant part: “Any and all disputes or claims that arise out of this Agreement, a breach of this Agreement, or out of the relationship between me and National Entertainment Group, LLC (including any wage claim, any claim based upon promises or duties NEG made or owed to me, any claim based upon promises or duties I made or owed to NEG, as well as any claim for money, compensation, tips and/or fees, any claim for wrongful termination, or any claim based upon any statute, regulation, or law, including those dealing with wages and hours, overtime, discrimination, sexual harassment, civil rights, age, gender, sexual preference, or disabilities, as well as any tort claims) shall be resolved by arbitration in accordance with the then effective arbitration rules of the American Arbitration Association (“AAA”), and judgment upon the award rendered pursuant to such arbitration shall be final and binding and may be entered in any court having jurisdiction.... I understand that by agreeing to the mandatory arbitration set forth herein, I waive my right to a jury trial and to proceed with any claim against NEG in a court of law.”

Wage suit. In September 2023, the dancer sued NEG on her own behalf and on behalf of all putative class action members, bringing claims under the FLSA, the Ohio Minimum Fair Wage Standards Act, the Ohio Semi-Monthly Payment Act, and a common law unjust enrichment theory. She alleged that NEG failed to maintain required employment records or to properly compensate her and other similarly-situated employees.

No stay below. NEG moved to dismiss the action, arguing that, even assuming the dancer had standing, the case should be stayed pending the completion of arbitration given that she had agreed to arbitrate any and all disputes with NEG when she signed the Lease Waiver three times.

A federal district court denied NEG’s motion to dismiss, concluding that the dancer plausibly alleged sufficient facts to support standing, and that the Lease Waiver’s arbitration provision was both procedurally and substantively unconscionable. NEG timely appealed to the Sixth Circuit.

Unconscionability analysis. The appeals court initially observed that, under Ohio law, “[t]he party asserting unconscionability of a contract bears the burden of proving that the agreement is both procedurally and substantively unconscionable.” And the Sixth Circuit reviews a district court’s denial of a motion to stay pending the completion of arbitration de novo.

Procedural unconscionability. Vacating and remanding the judgment of the district court, the appeals court first found that the dancer failed to meet her burden of establishing that the arbitration agreement was procedurally unconscionable. First, under Ohio law, the Sixth Circuit noted, “there is no strict requirement that an arbitration clause must be explained orally to a party when the arbitration clause at issue is not written in fine print and is not otherwise hidden from the party. ABM Farms, Inc. v. Woods, 692 N.E.2d 574, 578 (Ohio 1998).” Here, the Lease Waiver’s arbitration clause was not written in fine print. Instead, the arbitration clause appeared conspicuously with a heading in all capital letters. And the text of the arbitration clause itself appeared in the same size print as the rest of the Lease Waiver. The text of the arbitration clause also covered at least half of the entire single-page Lease Waiver. Nor did NEG “hide the meaning of the arbitration clause with abstruse legal terms.” Instead, the clause plainly stated, “[a]ny and all disputes or claims that arise out of this Agreement, a breach of this Agreement, or out of the relationship between me and [NEG]... shall be resolved by arbitration.”

Even though “nearly naked”? The dancer also asserted that she lacked an opportunity to read the Lease Waiver when she signed the same Lease Waivers—with identical arbitration provisions—in January 2022 and June 2023. Because she had already “spent significant time applying makeup,” was “nearly naked,” and had already paid the fee to work before being presented with the January 2022 and June 2023 Lease Waivers, she alleged, she was placed in a weaker bargaining position and was rushed to sign the Lease Waivers on both occasions.

Even putting aside the fact that she had previously signed the Lease Waiver in October 2020, however, the appeals court was unpersuaded. “Ohio courts have rejected bare allegations that one party lacked the opportunity to review an arbitration clause as grounds for declining to enforce it.” And here, although the dancer argued that she was placed in a weaker bargaining position, “[m]ere inequality of bargaining power is insufficient to invalidate an otherwise enforceable arbitration agreement.” She instead had to allege facts that plausibly support a conclusion that, as a consequence of the imbalance of bargaining power, she was coerced into agreement to the arbitration clause. And the district court did not find that NEG coerced her into signing the Lease Waiver.

Did not read it. The “fundamental flaw” in the dancer’s claim of procedural unconscionability, said the appeals court, “lies in that fact that [she], by her own admission, did not read the Lease Waiver before signing it.” And under Ohio law, “[a] person of ordinary mind cannot be heard to say that he was misled into signing a paper which was different from what he intended, when he could have known the truth by merely looking when he signed.” In short, the dancer “had reasonable opportunity to understand the plain terms of the arbitration clause, which were not hidden in a ‘maze of fine print,’” observed the Sixth Circuit. The Lease Waiver’s arbitration clause was not thus procedurally unconscionable, and her unconscionability argument failed on that basis alone.

Substantive unconscionability. Noting that it “need not address [the dancer’s] substantive unconscionability argument because we have concluded that the arbitration agreement was not procedurally unconscionable,” the appeals court nonetheless found that the agreement was also not substantively unconscionable. The dancer argued that the arbitration clause—considered alone—is substantively unconscionable because it is not supported by consideration. State and federal courts, however, have consistently held that a “mutuality of promises” is sufficient consideration to bind both parties to a contract, observed the court. And here, because the Arbitration Agreement bound both the dancer and NEG, and applied to any claims that either party may assert against the other, the agreement to arbitrate was supported by adequate consideration.

The case is No. 24-3725.

Judge: Gibbons, J.

Attorneys: Daniel J. Canon (Saeed & Little) for Jessica Hines. Damion M. Clifford (Arnold & Clifford) for National Entertainment Group, LLC.

Companies: National Entertainment Group, LLC

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