California Supreme Court Watch

#23-160 Fuentes v. Empire Nissan, Inc., S280256. (B314490; 90 Cal.App.5th 919; Los Angeles County Superior Court; 20STCV35350.) Petition for review after the Court of Appeal reversed an order denying a petition to compel arbitration in a civil action. This case presents the following issue: Is the form arbitration agreement that the employer here required prospective employees to sign as a condition of employment unenforceable against an employee due to unconscionability?

Petition for review granted: 8/09/2023

Case fully briefed: 3/28/2024

Cause argued and submitted: 11/04/2025

Opinion filed: Judgment reversed: 2/02/2026

See the Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93.)

“In sum, we agree with the Court of Appeal that the trial court erred in relying on the arbitration agreement’s illegibility to support a finding of substantive unconscionability. A contract’s legibility generally does not affect the substance of its terms.

Nevertheless, we hold that the Court of Appeal erred in two ways. First, it erred by relying on a presumption in favor of arbitration to conclude that the agreement’s terms were not substantively unconscionable, while declining to rule on whether the agreement was procedurally unconscionable. (Fuentes, supra, 90 Cal.App.5th at p. 931.) The court should instead have treated the arbitration agreement like any other contract and closely scrutinized the agreement’s terms for unfairness or one-sidedness, given the high degree of procedural unconscionability, and construed any ambiguous provisions against Empire Nissan, as the drafting party. (Kho, supra, 8 Cal.5th at p. 130; Sandquist, supra, 1 Cal.5th at p. 248.) Second, the court erred by directing the trial court to grant Empire Nissan’s motion to compel arbitration rather than permitting the trial court to consider on remand Fuentes’s argument that the written agreement did not give rise to a valid contract. For these reasons, we reverse the judgment of the Court of Appeal and remand with directions that the case be returned to the trial court for further proceedings consistent with our decision.”

Justice Groban authored the opinion of the Court, in which Justices Corrigan, Liu, Kruger, Evans, and Stewart* concurred.

Chief Justice Guerrero filed a dissenting opinion.