On April 22, 2026, Second District Court of Appeal, Division 7, reaffirmed an important principle for California employers: minor inconsistencies in arbitration agreements will not necessarily render those agreements unenforceable where the parties clearly intended to arbitrate employment disputes. Santana v. Studebaker Health Care Center, LLC (Cal. Ct. App., Second Dist., Div. 7, Apr. 22, 2026).

Brief Factual Background

An employee signed multiple arbitration-related documents during the onboarding process. After filing a wage-and-hour and representative PAGA action, the employee argued that the arbitration agreement was unenforceable because the documents contained inconsistencies regarding arbitration procedures and the treatment of PAGA claims. The trial court denied the employer’s motion to compel arbitration.

The Court of Appeal reversed.

The Court’s Holding

The Court of Appeal concluded the multiple arbitration-related agreements consistently reflected the parties’ mutual intent to resolve employment disputes through arbitration. Although certain provisions were not exactly aligned, the inconsistencies were not sufficiently material to invalidate the agreement.

Importantly, the Court also addressed the employee’s argument that the arbitration agreement was procedurally unconscionable because it was presented as a condition of employment. The Court acknowledged that employment arbitration agreements are often contracts of adhesion, which may establish a low degree of procedural unconscionability. However, the Court emphasized that this fact alone does not render an agreement unenforceable. Under California law, a finding of unconscionability requires both procedural and substantive unconscionability, and they are evaluated on a sliding scale. Here, the employee failed to demonstrate sufficient substantive unconscionability to invalidate the agreement.

Finally, the Court held that an unenforceable PAGA waiver did not require invalidating the entire arbitration agreement. Instead, the PAGA waiver could be severed, allowing the remainder of the agreement to be enforced.

Why This Matters for Employers

This decision is a reminder that California appellate courts continue to enforce arbitration agreements when the parties’ intent is clear. The decision also reinforces that the mere fact an arbitration agreement is presented on a take-it-or-leave-it basis does not establish a high degree of procedural unconscionability.

While employers should strive for consistency across their onboarding documents, drafting imperfections alone are not necessarily fatal to enforcement. Employers should nevertheless continue to review and update their arbitration agreements periodically to ensure compliance with California law.

Stokes Wagner will continue to monitor updates and will provide additional updates as they become available. If you have any questions, do not hesitate to contact a Stokes Wagner attorney.

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THIS DOCUMENT PROVIDES A GENERAL SUMMARY AND IS FOR INFORMATIONAL/EDUCATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE COMPREHENSIVE, NOR DOES IT CONSTITUTE LEGAL ADVICE. PLEASE CONSULT WITH COUNSEL BEFORE TAKING OR REFRAINING FROM TAKING ANY ACTION.