Tough Mudder Approach to Arbitration Upheld
People who want to register for a Tough Mudder obstacle course event must acknowledge assent to terms and conditions, which include a mediation and arbitration clause. But what happens if the event is moved at the last minute from Massachusetts to Maine, registrants decide not to travel to Maine and unsuccessfully seek a refund, and the arbitration clause applies to any claims “arising out of my participation” in the event?
The Massachusetts Appeals Court followed the lengthy line of court decisions favoring arbitration to conclude that registrants were bound to arbitrate even though they did not participate.
The court quickly dealt with a host of arguments that the arbitration clause should not apply. First, “The entire agreement is preceded by a conspicuous, clearly-worded, all-caps header stating: ‘PARTICIPANTS: READ THIS DOCUMENT CAREFULLY BEFORE SIGNING. THIS DOCUMENT HAS LEGAL CONSEQUENCES AND WILL AFFECT YOUR LEGAL RIGHTS AND WILL ELIMINATE YOUR ABILITY TO BRING FUTURE LEGAL ACTIONS.’” Second, the arbitration agreement was on the fourth page of seven, in the same font and type size as the other terms. Third, “The provision itself is only one paragraph long and uses fairly clear language.” Fourth, registrants could take as much time as they wanted to read the terms. Fifth, the terms and conditions “also required an affirmative response from the plaintiffs by clicking the ‘I accept’ button.”
The plaintiffs also argued that the contract was illusory, in that Tough Mudder could keep the registration fees even if the event was cancelled. But the court noted that this argument, whether the contract was unconscionable or illusory, was one for the arbitrator to decide.
Finally, as to the argument that the clause only applied to those who participated, the Appeals Court held that it would apply precedent that doubts as to the scope of an arbitration clause should be resolved in favor of arbitration. Tough Mudder, not surprisingly, applied the same grit to validate its arbitration clause, that participants must apply to get through a Tough Mudder course.
The case is Pazol v. Tough Mudder, 2018 Mass. App. Unpub. LEXIS 379 (May 7, 2018).