Court Finds Confidentiality Provision In Arbitration Agreement Unconscionable, Compels Consumer Arbitration

The Eleventh Circuit has determined that a confidentiality provision in an arbitration clause was substantively unconscionable. The case involved a putative class action by David Johnson alleging that KeyBank National Association ("KeyBank") altered the order of debit card transactions to maximize their collection of overdraft fees. Johnson opened the account at issue in 2001 by signing an agreement stating that "all accounts opened under this Plan are subject to [KeyBank's] Deposit Account Agreement" (the "2001 Agreement"). The Deposit Account Agreement was a 1997 agreement with the arbitration clause at issue (the "1997 Agreement").

KeyBank moved to compel arbitration of Johnson's claims, arguing that Johnson agreed to be bound by the arbitration provision in the 1997 Agreement. The district court denied the motion, however, finding the arbitration clause to be unconscionable.