California’s Fifth District Court of Appeal’s decision in Ayala‑Ventura v. Superior Court is the first to directly contrast with the Second District Court of Appeal’s opinion in Cook v. University of Southern California. While both cases focus on arbitration agreements of “infinite” duration, Ayala-Ventura stresses the importance of context, industry, and drafting choices, which can mean the difference between an enforceable agreement and one that is struck down as unconscionable.

In Ayala‑Ventura, a janitorial company, CCS Facility Services, required new hires to electronically sign a five‑page “Mutual Agreement to Arbitrate”, which covered “all claims, disputes, and/or controversies … whether or not arising out of Employee’s employment or the termination of employment” between the employee, the company, related entities, and employees/agents. The arbitration agreement also contained a class action waiver.  Accordingly, when the employee brought a wage‑and‑hour class action, CCS moved to compel arbitration. Finding minimal procedural and substantive unconscionability, the trial court compelled the individual claims to arbitration and dismissed the class claims. The Court of Appeal, treating the appeal as a writ, affirmed on the merits.

Spending little time on the procedural unconscionability issue, the appellate court acknowledged the agreement’s adhesive nature but found such unconscionability minimal. The arbitration agreement was stand-alone, viewable in English or Spanish, required scrolling before assent, advised of the right to consult with counsel, the sections were clearly labeled, and there was no evidence of rushed execution, misrepresentation, or duress. Taken together, the circumstances did not rise to the level of “oppression” or “surprise” that would render such an agreement unenforceable.

Rather, the focus of the decision was the question of substantive unconscionability, and the impact of the Cook decision. On this issue, the Court of Appeal emphasized the importance of context.  CCS’s “whether or not arising out of employment” phrasing created ambiguity about non‑employment disputes, but the court applied Civil Code section 1643 and standard arbitration‑interpretation principles to construe it as limited to employment‑related claims wherever reasonable. In Cook, by contrast, USC’s near‑identical language, combined with its vast institutional footprint – hospitals, athletics, and other public‑facing operations – made it realistic that a former employee could have non‑employment disputes decades later that would be subject to the arbitration agreement, which the Second District deemed unconscionable.

The Court of Appeal in Ayala‑Ventura further stressed that parties are free to contract for broad arbitration where the universe of likely disputes remains tied to employment and the employer’s business, and that Cook did not create a per se rule against survival clauses or broadly worded coverage. CCS’s survival language (“shall survive termination” and modifiable only by a signed writing) was not automatically fatal because, unlike USC, CCS’s commercial janitorial operations did not realistically generate an open‑ended array of unrelated future claims. The court rejected hypothetical, remote scenarios (such as a future off‑duty accident) as too speculative to create substantive unconscionability.

“Mutuality” was another important factor that distinguished CCS’s agreement from those in Cook and Ramirez v. Charter Communications Inc. The agreements in those latter cases effectively required the employee to arbitrate a wider range of claims while leaving the employer and its affiliates with more freedom to litigate in court, contributing to a conclusion that the contracts were “permeated” with one‑sidedness. By contrast, CCS’s agreement defined “Company” to include related entities, obligated both sides to arbitrate the same universe of employment‑related claims, excluded only categories that are generally non‑arbitrable (workers’ compensation and unemployment), and provided that CCS would pay arbitral forum costs while the arbitrator could award any relief available in court. That structure supplied the “modicum of bilaterality” California law requires and made severance of a problematic provision pursuant to the agreement’s severability clause, if ever needed, a real option rather than an empty gesture.

The decision also briefly touched on issues concerning the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”). The employee argued the agreement conflicted with the EFAA and with the Federal Arbitration Act’s preference for stays over dismissals upon compelling arbitration. The appellate court rejected the EFAA argument because the agreement pre‑dated the statute’s effective date and the complaint alleged no such claims, reinforcing that unconscionability is assessed based on the law and facts at contract formation, not on speculative future pleadings.

Finally, Ayala‑Ventura serves as a reminder that published appellate decisions like Cook bind trial courts statewide; a superior court may distinguish Cook on its facts, as the Fifth District ultimately did, but treat such a decision as merely persuasive or of optional impact. For employers, the combined impact of Cook, Ramirez, and Ayala‑Ventura is that broad employment arbitration agreements remain viable if they are drafted with mutuality, realistic scope, and industry and practical context in mind. Arbitration agreements that, in substance, channel both sides’ employment‑related disputes into a fair arbitral forum – rather than sweeping in every conceivable claim for life – are far more likely to be enforced.

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