Why This California Arbitration Agreement Survived an Unconscionability Challenge
Class Action Defense
A Ninth Circuit ruling issued on June 23, 2026, provides California employers with a useful new roadmap for defending the scope of an employment arbitration agreement against an unconscionability challenge.
In Cocom v. ABM Aviation, Inc., the court reversed a ruling that refused to enforce an employer's arbitration agreement, relying heavily on the California Court of Appeal's 2024 decision in Cook v. University of Southern California.
The difference was not one magic phrase. The Ninth Circuit read ABM's agreement as a whole and concluded that its scope was limited to employment-related disputes. That narrower reading also shaped the court's analysis of the agreement's duration and coverage of third parties.
Here's what the court actually relied on and what California employers should review in their own arbitration agreements.
Key Takeaways
The Ninth Circuit's June 2026 Cocom ruling held that the challenged scope, duration, and third-party mutuality provisions were not substantively unconscionable, largely because the agreement was construed as limited to employment-related disputes.
The phrase "including but not limited to" did not make ABM's agreement unconscionably broad because the Ninth Circuit construed the general language in light of the specific employment-related categories and the agreement as a whole.
In Cocom, the agreement's employment-related scope also shaped the analyses of duration and mutuality. The Ninth Circuit found the scope inherently limited when claims could accrue and restricted the kinds of third-party disputes covered.
In Cocom, the Ninth Circuit held that the challenged PAGA waiver could be severed if unconscionable because it was collateral to the agreement's central purpose and severance was consistent with the agreement's express severability provision.
This ruling is specific to agreement drafting; it doesn't change whether arbitration is the right forum for your business in the first place.
What the Ninth Circuit Decided in Cocom v. ABM Aviation
In Cocom, the plaintiff argued that the employer's arbitration agreement was unconscionable: too broad in scope, indefinite in duration, and one-sided in its coverage. The Ninth Circuit rejected all three arguments, and the reasoning matters more than the outcome.
The court also rejected a challenge to language limiting the preclusive or precedential use of arbitration awards, finding that provision consistent with California's default rule.
Challenge Raised | Ninth Circuit's Analysis |
|---|---|
Scope too broad | The agreement's "including but not limited to" language was narrowed by a specific list: "my hiring, my employment, my compensation, and/or the end of my employment." Narrowing language saved it |
Duration unlimited | Because the agreement covered employment-related disputes, the court reasoned that covered claims cease accruing upon the end of the employment relationship, thereby inherently limiting the agreement's duration. |
Lacked mutuality | Coverage of related entities, officers, and vendors didn't create unconscionability, since coverage stayed tied to employment-related claims only |
Scope was the central distinction in the Ninth Circuit's analysis, but the court did not reduce Cook and Cocom to a single drafting phrase. It examined the specific language, enumerated claims, duration implications, third-party coverage, and the agreement as a whole.
Why "Including But Not Limited To" Didn't Make the Agreement Too Broad
"Including but not limited to" is standard boilerplate in almost every arbitration agreement in circulation.
On its own, that phrase invites exactly the broad reading that led to Cook's agreement being struck down. What saved the agreement in Cocom wasn't the removal of that phrase. It was what came immediately after: a specific list that tied the phrase back to employment.
The practical lesson is that broad introductory language should be reviewed in the context of the specific disputes the agreement identifies and the agreement as a whole. In Cocom, employment-focused categories gave the Ninth Circuit a basis to construe the scope narrowly.
The court also considered the business context. ABM provided a specific commercial service, which the court contrasted with the broader range of non-employment interactions that may be possible in Cook. Employers with multiple business lines should not assume identical wording will necessarily receive the same contextual reading.
Our Class Action Defense team reviews exactly this kind of agreement to confirm that the class waiver holds up alongside the PAGA severability language, rather than to determine whether the scope clause survives an unconscionability challenge on its own.
Cocom Did Not Arrive in a Vacuum: Cook, Stoker, and Ayala-Ventura
The Ninth Circuit was not writing on a blank slate. Its opinion addressed a developing line of California cases reaching different conclusions about broadly worded employment arbitration agreements.
In Cook v. University of Southern California (2024), the court read an agreement covering claims "whether or not" related to employment as reaching disputes wholly outside the employment relationship and found multiple provisions substantively unconscionable.
In Stoker v. Blue Origin, LLC (2026), another California appellate court applied Cook to a similarly broad agreement.
But Ayala-Ventura v. Superior Court (2026) took a narrower approach and rejected the argument that broad coverage automatically made an arbitration agreement substantively unconscionable.
Cocom distinguishes Cook and Stoker and repeatedly draws support from Ayala-Ventura. For California employers, that means the current drafting landscape is more nuanced than a simple rule that broad language always fails. Courts are examining the agreement's actual wording, context, and the disputes its scope can reasonably be read to cover.
What Cocom Means for PAGA Waiver and Severability Language
Cocom also addressed the agreement's waivers of representative PAGA actions and public injunctive relief. The Ninth Circuit did not decide whether those provisions were substantively unconscionable.
Instead, the court held that even if the waivers were unconscionable, they could be severed under California law in this agreement. The severability clause mattered, but it was not the only reason. The court concluded that the central purpose of the agreement was to arbitrate employment-related claims and that the challenged waivers were collateral to that purpose. Removing them would not require the court to rewrite the agreement or add new terms.
For employers, the takeaway is not that a severability clause automatically saves every defective arbitration agreement. Severability language can become important when a court can remove a challenged provision without changing the agreement's central purpose.
If you haven't reviewed how your agreement's PAGA language interacts with severability, our companion piece on what your arbitration agreement actually does and doesn't stop under PAGA goes deeper into that specific exposure.
How to Audit Your Arbitration Agreement After Cocom
Review your current agreement against the same issues the Ninth Circuit analyzed:
1.
What disputes does the scope clause actually cover?
Does the agreement expressly tie covered claims to hiring, employment, compensation, discipline, termination, or another employment-related relationship?
2.
Does any language expressly reach claims unrelated to employment?
Phrases such as "whether or not arising out of employment" received very different treatment in Cook.
3.
What claims are specifically enumerated?
A list dominated by wage, discrimination, retaliation, and other employment claims may support a narrower reading; broad tort categories can create a different scope argument.
4.
What does the agreement say about duration?
Does it expressly survive indefinitely, or is the scope itself tied to claims accruing from the employment relationship?
5.
Who can invoke the agreement?
If parents, affiliates, officers, employees, clients, or vendors are covered, determine whether their protection is limited to employment-related disputes.
6.
What rules and procedures are incorporated?
In Cocom, the agreement's adoption of AAA Employment Arbitration Rules supported the court's employment-focused reading.
7.
Can a challenged provision be severed?
Review the severability clause and whether removing a potentially invalid term would preserve the agreement's central purpose without requiring judicial rewriting.
If a claim has already tested your agreement's scope language and lost, that's also the point where a class action becomes the real exposure. Our guide on how employment class actions actually work in California walks through what happens when an individual dispute widens into a class action.
Conclusion
The Ninth Circuit's June 2026 decision in Cocom v. ABM Aviation, Inc. gives California employers a useful roadmap for reviewing employment arbitration agreements after Cook.
The court did not announce a magic phrase or hold that "including but not limited to" is always safe. It read ABM's agreement as a whole and concluded that the scope was limited to employment-related disputes. That narrower scope also shaped the court's analysis of duration and third-party mutuality.
The drafting question for employers is therefore broader than whether one phrase appears in the agreement. What claims does the agreement actually cover? Could the language reasonably reach disputes unrelated to employment? What specific claims are listed? Who can invoke the agreement? What procedural rules are incorporated? And can a challenged provision be severed without rewriting the agreement's central purpose?
If your arbitration agreement predates Cook, Stoker, Ayala-Ventura, or Cocom, DefendMyBiz can review its scope, duration, third-party coverage, and severability language against the current California case landscape. Book a free 15-minute consultation with our employer defense team.
Frequently Asked Questions
What makes a California arbitration agreement unconscionable?
What's the difference between the Cocom and Cook rulings?
Does a defective PAGA waiver void my entire arbitration agreement?
Should I update my arbitration agreement based on this ruling?
Is "including but not limited to" unenforceable in a California arbitration agreement?
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