Fifth Circuit Court of Appeals Rejects One-Sided Arbitration Clauses
The Fifth Circuit found 'sole discretion' arbitration clauses unenforceable under Louisiana law.
Why it matters: Law firms and corporate counsel must revisit arbitration clauses to ensure fairness and enforceability. This ruling highlights risks of one-sided provisions that allow only one party to decide arbitration rights.
- The case, MAPP, LLC v. Floor & Decor Outlets of America, Inc., was decided by the Fifth Circuit Court of Appeals in September 2026.
- The arbitration clause gave only Floor & Decor the exclusive right to decide on arbitration, denying MAPP the ability to compel arbitration.
- The clause also permitted Floor & Decor to recover attorney’s fees for arbitration motions, further favoring them.
- The court ruled that the provision lacked mutuality and reflected unequal bargaining power, rendering it unenforceable under Louisiana law.
In MAPP, LLC v. Floor & Decor Outlets of America, Inc., the Fifth Circuit Court of Appeals held in September 2026 that arbitration clauses granting one party "sole discretion" to decide whether arbitration is initiated are unenforceable under Louisiana law.
The clause at issue allowed only Floor & Decor to unilaterally decide if arbitration would proceed, denying MAPP the reciprocal right to compel arbitration. It further permitted Floor & Decor to recover attorney’s fees for motions to compel arbitration, which exacerbated the imbalance.
The court explained that such a clause lacks mutuality—the basic requirement that both parties have comparable obligations and rights—creating an unfair contractual relationship. Louisiana law specifically disallows contracts of adhesion: standardized agreements drafted by one party with superior bargaining power, leaving the other party little negotiation ability.
By granting only Floor & Decor control over arbitration and shifting fees to MAPP in certain motions, the contract was found to reflect unequal bargaining power and was therefore unenforceable. The court emphasized that arbitration agreements must be balanced to ensure both sides have meaningful arbitration rights.
This ruling serves as a caution for legal professionals drafting or reviewing arbitration clauses, particularly in consumer and commercial contracts governed by Louisiana law. Provisions that allow only one party to decide whether to arbitrate or that impose fee-shifting skewed in one party's favor risk invalidation.
For further legal analysis, consult the official court opinion and commentary such as the discussion on DLM Law's blog.
By the numbers:
- September 2026 — Date of the Fifth Circuit's ruling
- 1 — Party granted sole discretion to compel arbitration in the disputed clause
- $ — Attorney’s fees allowed only for one party’s motions, favoring Floor & Decor
Yes, but: While the ruling aligns with Louisiana's stance on enforcing balanced contracts, its principles may not apply identically in other states or federal circuits, so corporate counsel should consider the jurisdictional context.
What's next: Legal teams should audit arbitration clauses in contracts governed by Louisiana law and monitor if similar challenges arise in other jurisdictions, especially concerning one-sided arbitration language.