In this guide8 sections
In 2025, a California Court of Appeal refused to enforce an arbitration agreement that a new employee signed on her first day after an HR manager rushed her and told her it would let both sides resolve issues “without having to pay lawyers.” The agreement said the opposite: each side would generally pay its own attorney’s fees. If you signed under pressure, or after being told something untrue about the agreement, a court may refuse to enforce it.
Key takeaways
- A court can refuse to enforce an arbitration agreement that is both procedurally and substantively unconscionable (Civil Code §1670.5).
- Rushing a new hire through a stack of onboarding forms, with signing required to start work, can make an agreement procedurally unconscionable.
- What HR tells you about an agreement matters: the court looked at the effect of the inaccurate explanation, not whether HR meant to mislead.
What happened in the case
According to published summaries of the decision, the employee was hired in 2020 as a care coordinator at a behavioral health company. On her first day, an HR manager gave her 31 onboarding documents to complete before starting work, including a five-page arbitration agreement, and told her to sign as fast as possible.
She hesitated because she did not understand it. The HR manager said it was required to start work and would help resolve issues without having to pay lawyers. In fact, each party would bear its own attorney’s fees unless the arbitrator ordered otherwise.
She was later fired and sued for discrimination, retaliation and whistleblower violations. The trial court denied the employer’s motion to compel arbitration, and the Court of Appeal affirmed.
Why the court refused to enforce it
| Issue | What the court found |
|---|---|
| Procedural unconscionability | A take-it-or-leave-it agreement, presented under time pressure in a 31-document packet, with an explanation the court called “manifestly untrue.” |
| Substantive unconscionability | Formal, litigation-style procedures, not the quick, informal process she was told about; the court found the terms so one-sided they benefited only the employer. |
The court noted this would be a different case if she had been accurately informed and given a reasonable chance to review the agreement and consult a lawyer. How an agreement is presented can matter as much as what it says.
How California courts judge arbitration agreements
Under Civil Code §1670.5, a court may refuse to enforce an unconscionable contract, strike the unfair clause, or limit it. Both procedural unfairness (how the agreement was presented) and substantive unfairness (one-sided terms) must be present, on a sliding scale: the more oppressive the circumstances, the less one-sided the terms need to be.
For employment claims like discrimination under FEHA, an arbitration agreement must also provide a neutral arbitrator, more than minimal discovery, a written decision, all remedies available in court, and no arbitrator fees or unreasonable costs charged to the worker. For another example, see our post on a published appellate win against an unfair arbitration agreement.
Your rights when you are asked to sign onboarding documents
- Ask for a copy. Labor Code §432 entitles you to a copy of any document you sign related to getting or keeping a job, on request.
- Ask for time. Ask to take the agreement home to read, and note any refusal.
- Write down what you were told. Note who explained the agreement, when, and the words used. Inaccurate explanations can matter later.
- Know the sexual harassment exception. For sexual harassment or sexual assault disputes, federal law lets you choose court even with a signed arbitration agreement (9 U.S.C. §402).
Example (hypothetical): Lena starts a warehouse job and is told to sign 20 forms in ten minutes. A supervisor says the arbitration form “just means we talk things out first.” If Lena later sues, her notes about that conversation and the rushed signing could support a challenge to the agreement.
If your employer moves to compel arbitration
- Gather every version of the agreement and any handbook acknowledgments. Here’s how to request your personnel file.
- Write down how and when you signed while your memory is fresh.
- Meet your deadlines. A CRD complaint for discrimination or retaliation generally must be filed within three years of the last harm.
- Get legal advice. Learn more about mandatory arbitration clauses and arbitration vs. court.
Frequently asked questions
Does signing an arbitration agreement mean I can never go to court?
Not necessarily. A court decides whether the agreement is enforceable, and unfair agreements or unfair signing conditions can defeat it.
HR said the agreement was “just a formality.” Does that matter?
It can. In this case, an inaccurate explanation of the agreement helped make it unenforceable, even without proof that HR meant to mislead.
Does my employer have to tell me to talk to a lawyer before signing?
Generally no. But a real chance to review the agreement and get advice is one thing courts consider.
Can I get a copy of the arbitration agreement I signed?
Yes. Under Labor Code §432, you are entitled to a copy of any employment document you signed, on request.
Talk to a California employment lawyer
Employees First Labor Law represents workers exclusively. If your employer is trying to force your claim into arbitration, we offer free virtual consultations to review the agreement. Contact us or call (310) 853-3461.
This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.
