California Court Upholds Employer Arbitration Agreement and Limits Reach of Cook v USC in Wage-and-Hour Class Case
Estimated reading time: 7 minutes
A new California Court of Appeal decision gives employers a useful reminder that not every broad arbitration agreement will fall for the same reasons discussed in Cook v. University of Southern California. In Ayala-Ventura v. Superior Court, the Fifth District upheld an employer’s arbitration agreement in a wage-and-hour class case, concluding the agreement was not unconscionable even though the employee argued it was too broad, indefinite in duration, and lacking in mutuality. The court also made clear that Cook did not control because the factual setting and the practical reach of the agreement were materially different.
That makes this case worth attention for at least two reasons. First, it shows that some courts will continue to evaluate arbitration agreements in context rather than by slogan or label. Second, it gives both employers and practitioners a more developed roadmap for how California courts may distinguish Cook when the employer’s operations, the agreement’s structure, and the realistic range of future disputes are more limited.
The Lawsuit and the Arbitration Agreement
Jazmin Ayala-Ventura sued her former employer, CCS Facility Services-Fresno Inc., in a putative class action alleging a range of California wage-and-hour violations. Her complaint included claims for unpaid minimum and overtime wages, meal-period and rest-break violations, waiting-time penalties, wage-statement violations, unreimbursed business expenses, failure to produce employment records, and unfair competition. She brought those claims both individually and on behalf of other hourly paid or nonexempt employees.
CCS moved to compel arbitration based on a five-page arbitration agreement Ayala-Ventura electronically signed during onboarding in June 2021. According to the opinion, the onboarding system required the employee to open the policy, scroll through it, and then indicate agreement. The arbitration agreement stated that CCS and the employee agreed to arbitrate claims either side might have, including wage claims, contract claims, tort claims, discrimination and harassment claims, benefits claims, and statutory claims, while excluding certain categories such as workers’ compensation, unemployment claims, and claims for injunctive relief. It also included a class, collective, and representative action waiver, except for representative claims that could not be waived as a matter of law.
What the Trial Court Did
The trial court granted the motion, ordered arbitration of Ayala-Ventura’s individual claims, dismissed the class claims, and stayed the action. On appeal, Ayala-Ventura argued the agreement was unconscionable and that the trial court should have followed Cook v. University of Southern California (2024) 102 Cal.App.5th 312.
The Procedural Twist on Appeal
Before reaching the merits, the Court of Appeal addressed a procedural issue that practitioners will recognize immediately. An order compelling arbitration is generally not appealable. But here, the trial court had also dismissed the class claims. Because that created uncertainty about appealability, the Fifth District exercised its discretion to treat the appeal as a petition for writ of mandate and resolved the enforceability issue on the merits. That part of the discussion was not certified for publication, but it remains useful reading for lawyers dealing with arbitration orders entered alongside class-claim dismissals.
Minimal Procedural Unconscionability Was Not Enough
On unconscionability, the court began with standard California principles. Arbitration agreements are favored when valid, but they remain subject to generally applicable contract defenses, including unconscionability. Both procedural and substantive unconscionability must be present, though not in the same degree. Here, because the relevant facts were undisputed, the court reviewed enforceability de novo.
The court agreed there was at least a minimal degree of procedural unconscionability. The agreement was a preprinted employment document offered on a take-it-or-leave-it basis, which is a familiar sign of adhesion. But the court found little else suggesting oppression or surprise. The agreement was stand-alone, not buried in another document. It could be viewed in English or Spanish. The record did not show deception, duress, or unusual time pressure. In the court’s view, that meant closer examination of the substantive terms was appropriate, but only on the low end of the procedural scale.
Why the Court Said Cook Did Not Control
The more important analysis involved substantive unconscionability and the employee’s reliance on Cook. Ayala-Ventura argued that the agreement was overbroad because it reached claims “whether or not arising out of” employment or termination. The Fifth District acknowledged some ambiguity in that language, but it applied the rule that where an arbitration agreement is reasonably susceptible to a lawful interpretation, courts should prefer that reading. The court therefore construed the agreement as applying only to employment-related claims. That interpretive step substantially narrowed the overbreadth problem the employee was trying to establish.
The court then explained why Cook still did not require reversal even if the employee’s broader reading were accepted. In Cook, the employer was USC, an institution with many different operations and relationships that could generate all sorts of disputes long after employment ended and wholly apart from the employment relationship. The opinion in Ayala-Ventura contrasted that setting with CCS, a commercial janitorial company. The court found it much harder to imagine the same expansive universe of unrelated future disputes in this context. That practical difference was central to the court’s conclusion that the agreement here was not unconscionably broad.
Why the “Infinite Duration” Argument Failed
The same contextual reasoning carried over to duration. Ayala-Ventura argued the agreement was effectively “infinite” because it survived termination and could be modified only in a signed writing. The Fifth District did not disagree that the language was similar to language criticized in Cook. But it emphasized that duration cannot be judged in the abstract. What made the agreement in Cook problematic was not merely that it survived employment, but that it did so in a setting where the employer’s scope and operations made many future nonemployment disputes plausible. Here, the court found the employee’s examples too speculative to show substantive unfairness.
Why the Mutuality Challenge Also Failed
The employee also argued the agreement lacked mutuality because it required her to arbitrate claims against CCS and certain affiliated persons, while not equally requiring those employees or agents to arbitrate claims against her. The Fifth District rejected that argument. It emphasized that the agreement was between CCS and Ayala-Ventura, and that the relevant mutuality inquiry focuses on whether the stronger contracting party imposed arbitration on the weaker party without accepting the same obligation itself. Because the agreement bound both employer and employee to arbitrate their claims against each other, the court found the required “modicum of bilaterality” was present. The court also distinguished Cook on this point because the agreement there did not equally bind USC’s related entities.
Other Terms That Helped the Employer
Other features of the agreement also helped the employer. The agreement provided for a neutral arbitrator, reasonable discovery, arbitration in the county where the employee worked, the full range of remedies otherwise available in court, and employer payment of the arbitrator’s fees and incidental arbitration costs. Those provisions supported the court’s conclusion that the agreement did not impose unfair barriers to the employee’s pursuit of statutory rights.
A Useful Reminder About Stare Decisis
The opinion also includes a useful reminder about stare decisis, even though that portion was not certified for publication. The trial court had suggested it was not obligated to find Cook persuasive because the Fifth District had not yet cited it. The Court of Appeal corrected that point. Published Court of Appeal decisions are binding on California trial courts unless there is conflicting appellate authority or Supreme Court disapproval. A trial court may distinguish a published case on materially different facts, but it may not disregard it simply because the case came from another district or because the court believes it was wrongly decided.
What Employers and Practitioners Should Take From Ayala-Ventura
For employers, the practical takeaway is not that every arbitration agreement is now secure. The better takeaway is that careful drafting still matters, and so does business context. A stand-alone agreement with bilateral obligations, a neutral arbitral process, reasonable discovery, cost protections, and language that can be fairly read as limited to employment-related disputes remains in a much stronger position than an agreement that appears to sweep indefinitely into every conceivable future dispute.
For practitioners, Ayala-Ventura is an important development because it narrows the practical reach of Cook without rejecting it. The Fifth District did not say Cook was wrong. It said Cook was distinguishable. That is likely to be the real battleground in future cases. Expect courts to focus less on broad labels like “overbroad” or “infinite” and more on the actual employer, the actual agreement, and the realistic consequences of the language used.
Ayala-Ventura v. Superior Court was filed on February 19, 2026, by the California Court of Appeal, Fifth Appellate District, Case No. F089695, and was certified for partial publication on March 17, 2026.