February 2, 2026. Evangelina Yanez Fuentes had five minutes. Five minutes to read a dense employment packet before rushing off to a drug test. The arbitration agreement buried inside that packet was printed in tiny, blurry font: 900 words crammed into three vertical inches, including one sentence that ran 214 words long. She never received a copy. She was never told she was signing away her right to a jury trial.
When Empire Nissan fired her after she requested an extension of her cancer treatment leave, the company tried to use that barely legible contract to force her out of court and into private arbitration. The Court of Appeal had held that the company could enforce its agreement. On February 2, 2026, the California Supreme Court said: not so fast.
“The agreement’s formatting and the way Empire Nissan presented it to Fuentes ‘did not promote voluntary or informed agreement to its terms.’”
In Fuentes v. Empire Nissan, Inc. (Case No. S280256), the Supreme Court reversed the Court of Appeal’s decision and remanded the case back to the trial court, delivering an important win for workers across California. Clarkson Law Firm represented Ms. Fuentes before the state’s highest court.
What the Court Decided
The Supreme Court’s ruling clarifies several important principles that will govern how courts evaluate employment arbitration agreements going forward.
Illegibility triggers heightened scrutiny.
The Court confirmed that tiny print and incomprehensible formatting go directly to procedural unconscionability, which measures how oppressively an agreement was presented. When procedural unconscionability is high, a modest showing of unfair terms is enough to render the agreement unenforceable. Employers cannot design an unreadable contract and then hide behind the fact that an employee signed it.
The pro-arbitration presumption has limits.
The Court of Appeal had leaned on “the principle that the law strongly favors arbitration” to resolve ambiguities in Empire Nissan’s favor. The Supreme Court rejected that reasoning outright. As the Court reaffirmed, the law does not favor arbitration over litigation; it simply requires that arbitration agreements be treated like any other contract. When a contract is riddled with procedural unconscionability, ambiguities must be resolved against the drafting employer, not in its favor.
One-sided arbitration mandates don’t hold up.
The Court scrutinized the relationship between the arbitration agreement and two confidentiality agreements Empire Nissan later had Fuentes sign. Those confidentiality agreements appeared to preserve Empire Nissan’s right to bring its own claims in court — claims that Fuentes likely would never bring — while still requiring her to arbitrate everything. The Supreme Court found the Court of Appeal’s analysis of this issue legally flawed and sent it back for proper consideration.
Validity of the agreement itself remains an open question.
The trial court had originally denied the motion to compel arbitration on unconscionability grounds alone and never reached whether a valid contract was formed at all. The Supreme Court held that the Court of Appeal erred by ordering arbitration without allowing that threshold question to be answered. On remand, the trial court can now consider whether the agreement was so illegible, and presented under such coercive circumstances, that it never gave rise to a valid contract in the first place.
Clarkson’s Role
Clarkson was brought into this case as appellate counsel to handle the petition for review and merits briefing before the California Supreme Court, partnering with trial counsel on behalf of Ms. Fuentes. Clarkson partner Glenn Danas argued the case before the Court.
The arguments Clarkson advanced are reflected throughout the majority opinion: that courts must treat arbitration agreements like any other contract, that procedural unconscionability demands close scrutiny of substantive terms, and that the supposed pro-arbitration presumption cannot be weaponized to rescue one-sided agreements from the scrutiny they deserve.
Why This Matters for Workers
Arbitration agreements are now a near-universal feature of employment in California. Workers routinely sign them as part of onboarding: often in stacks of paperwork, under time pressure, without any meaningful opportunity to understand what they are giving up. The Fuentes decision puts real teeth into the doctrines that are supposed to protect workers in these situations.
Courts must now closely scrutinize the terms of difficult-to-read contracts. Employers who design incomprehensible agreements to obscure unfair terms cannot then invoke those same agreements to avoid accountability. And workers who were never truly given the opportunity to understand what they signed may have grounds to challenge whether a valid contract was formed at all.
If you or someone you know signed an arbitration agreement under similar circumstances — rushed, illegible, or never fully explained — and later faced wrongful termination, discrimination, or other unfair treatment, contact us today. Clarkson remains committed to making sure workers’ voices are heard.
The case is Fuentes v. Empire Nissan, Inc., Case No. S280256, Supreme Court of California, February 2, 2026.
