Arbitration
Ninth Circuit Reverses on Arbitration Unconscionability
Updated
In Cocom v. ABM Aviation, Inc., the Ninth Circuit held that an employer’s arbitration agreement was not substantively unconscionable because, properly read, it was limited to employment-related disputes, making it distinguishable from the California decision (Cook v. University of Southern California) the district court had relied on. The court reversed the order denying arbitration and remanded for further proceedings.
Background
Robert Cocom worked as an airport janitor for ABM Aviation, a commercial janitorial services company, from 2020 to 2024. When he was hired, he signed a three-page Mutual Arbitration Agreement (the “MAA”) making arbitration the exclusive remedy for covered claims. In 2024, Cocom filed a putative wage and hour class action in state court. ABM removed it to federal court and moved to compel arbitration and strike the class claims.
The United States District Court for the Central District of California denied the motion, finding the MAA both procedurally and substantively unconscionable. Relying heavily on Cook v. University of Southern California, the lower court read the agreement’s “including but not limited to” language to reach any claim whatsoever, then found its scope, duration, lack of mutuality, and bar on public injunctive relief unconscionable—and declined to sever any of it.
What the Court Held on Substantive Unconscionability
Reviewing the denial de novo, the Ninth Circuit rejected the district court’s broad reading of the MAA’s scope. Applying the principle of ejusdem generis, the court held that the general terms “any claim” were narrowed by the surrounding list of employment-related examples, so the MAA covered only employment-related disputes.
That narrower reading distinguished the case from Cook and from the more recent Stoker v. Blue Origin, LLC, both of which involved agreements that expressly reached tort and other claims unrelated to employment. California’s preference for interpretations that render a contract valid, the court added, takes priority over construing an adhesion contract against its drafter.
Because the MAA was limited to employment-related claims, its duration was not indefinite: such claims stop accruing when the employment relationship ends, leaving the statutes of limitations to cap the window. The court also found no unconscionable lack of mutuality, reasoning—as in Ayala-Ventura v. Superior Court—that the limited scope kept third-party claims unrelated to employment outside the agreement.
The court separately concluded that the MAA’s bar on giving arbitration awards preclusive or precedential effect merely restated California’s default rule and was not unconscionable.
An arbitration agreement read, under ejusdem generis, to cover only employment-related disputes is distinguishable from Cook and is not substantively unconscionable on grounds of scope, duration, or lack of mutuality.
What the Court Held on Severability
The court declined to decide whether the MAA’s waivers of representative PAGA actions and of public injunctive relief were substantively unconscionable, because even if they were, they could be severed. The parties’ central purpose—to arbitrate employment-related claims—was not tainted by those collateral waivers, and the MAA contained an express severability clause.
With most challenged provisions not unconscionable and any remaining ones severable, Cocom’s unconscionability defense failed. Because the lack of substantive unconscionability was dispositive, the court did not reach procedural unconscionability. It reversed and remanded.
What This Means
An employment arbitration agreement purportedly covering “any claim” may be construed to cover only employment-related disputes—despite the agreement's plain language. Phrases like “all disputes” and “any claim” can be narrowed by a subsequent list of specific terms. Such an agreement is distinguishable from Cook v. USC and not substantively unconscionable as to scope, duration, or mutuality.
This case reflects a willingness on the part of some judges to bend over backwards to avoid applying the plain meaning of an arbitration agreement if doing so would render it unenforceable. It is also represents a pattern among some courts to treat Cook v. USC with extreme reluctance.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.