Arbitration Agreement Was Not Substantively Unconscionable

Cocom v. ABM Aviation, Inc., 2026 WL 1793637 (9^th Cir. 2026)

In this putative wage and hour class action, the district court denied the employer’s motion to compel arbitration after concluding it was procedurally and substantively unconscionable based on the analysis of Cook v. University of S. Cal., 102 Cal. App. 5^th 312 (2024). The Ninth Circuit, relying largely upon Ayala-Ventura v. Superior Court, 119 Cal. App. 5^th 241 (2026), reversed, holding that the scope of the arbitration agreement was limited to employment-related claims (unlike the broader agreement at issue in Cook); the duration was “inherently limited” because employment-related claims cease accruing once the employment relationship ends; there was sufficient mutuality in that employment-related claims have an “inherent symmetry” because an employee is far more likely to sue the employer and third parties rather than the other way around; the agreement’s bar on using arbitration awards for preclusive or precedential effect is not substantively unconscionable; and, finally, even if the waivers of representative PAGA actions were substantively unconscionable, those provisions would be severable. Compare Phan v. Knight Sacramento SU Inc., 2026 WL 19056686 (Cal. Ct. App. 2026) (relying upon Cook, Court of Appeal affirms trial court’s order denying employer’s motion to compel arbitration vis-à-vis broader arbitration agreement); see also In re Orr, 178 F.4^th 525 (9^th Cir. 2026) (district court committed clear legal error by refusing to rule on whether it had compelled arbitration of plaintiff’s individual PAGA claims based on the Federal Arbitration Act or the California Arbitration Act).

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