Reported / Citable
Background
Robert Cocom worked as an airport janitor for ABM Aviation at a Los Angeles-area airport from 2020 to 2024. When hired, he signed a three-page Mutual Arbitration Agreement (MAA) requiring that employment-related disputes be resolved through arbitration administered by the American Arbitration Association (AAA) under its Employment Dispute Resolution rules. The MAA included a class and representative-action waiver, a waiver of PAGA — California’s Private Attorneys General Act, which allows employees to sue on behalf of the state to enforce labor laws — and a provision that arbitration awards could not be used as precedent in future cases.
After leaving ABM, Cocom filed a putative wage-and-hour class action in California state court. ABM removed the case to federal court and moved to compel arbitration under the MAA. The U.S. District Court for the Central District of California denied the motion, concluding the MAA was both procedurally unconscionable (a take-it-or-leave-it adhesion contract signed under rushed onboarding) and substantively unconscionable across multiple provisions. The district court relied primarily on the California Court of Appeal’s 2024 decision in Cook v. University of Southern California, which had struck down a similar arbitration agreement on grounds of overbroad scope, indefinite duration, and lack of mutuality.
The Court’s Holding
The Ninth Circuit reversed, finding the ABM MAA meaningfully different from the agreement struck down in Cook. The central distinction was scope. Unlike the Cook agreement, which covered claims “whether or not arising out of employment” — broad enough to encompass car accidents and unrelated torts — the ABM MAA’s enumeration of covered claims consisted entirely of employment-related matters (unpaid wages, discrimination, overtime, wrongful termination, and the like). Applying the interpretive canon of ejusdem generis — which limits general terms by the specific examples surrounding them — the court read “any claim” in the MAA to mean only employment-related claims. A court must also prefer interpretations that render a contract valid rather than void, reinforcing the narrower reading.
Because the MAA covered only employment-related claims, the duration and mutuality problems identified in Cook dissolved as well. Employment-related claims stop accruing when the job ends, so the agreement had an inherent time limit rather than an indefinite duration. And because third parties could only invoke the MAA to arbitrate employment-related claims, any asymmetry in enforcement rights was proportionate and not unconscionable. On PAGA and public-injunctive-relief waivers, the court held those provisions were severable even if unconscionable — they were collateral to the main purpose of arbitrating employment disputes and showed no systematic scheme to overreach.
Key Takeaways
- Employment arbitration agreements can survive Cook-style unconscionability challenges if covered claims are limited to employment-related matters — the key is ensuring the list of enumerated examples contains only employment claims, not general tort claims.
- “Including but not limited to” language does not make an agreement’s scope boundless; ejusdem generis can constrain the general term “any claim” to match the specific examples listed.
- Using AAA Employment Arbitration Rules reinforces the narrow-scope interpretation because those rules are explicitly designed for employment disputes.
- PAGA waivers and public injunctive relief waivers are severable collateral provisions; they will not void an entire arbitration agreement even if individually unconscionable.
- Employers should include a severability clause and use employment-specific arbitration rules to protect their agreements from wholesale invalidation under California unconscionability doctrine.
Why It Matters
California wage-and-hour class actions are among the most heavily litigated matters in the state, and the unconscionability doctrine has been one of plaintiffs’ most effective tools for escaping arbitration agreements. The Ninth Circuit’s Cocom decision narrows the reach of Cook at exactly the moment California trial courts were applying it broadly. For California employers — particularly in industries like hospitality, retail, and aviation services with large hourly workforces — this opinion provides a concrete drafting roadmap: enumerate only employment-related claims, use AAA Employment Rules, include a severability clause, and avoid language that could be read to cover claims unrelated to the job.
For workers and their counsel, the decision signals that arbitration agreements carefully scoped to the employment relationship remain enforceable despite procedural concerns about onboarding conditions. The PAGA severability holding is particularly significant: it forecloses the argument that a PAGA waiver taints the entire agreement, shifting the battleground to individual PAGA enforcement and the scope of any individual arbitration.