A California court says employers can't sidestep fairness in arbitration—see what this means for your HR policies
A California appeals court on October 17, 2025, affirmed that an employer’s arbitration agreement can be invalidated if it is found to be unconscionable and unfair to employees.
The case involves Sarah Gurganus, who worked for IGS Solutions LLC, a company providing employee management services for various operational entities, including some retail locations. Gurganus was employed at a California facility from September 2021 to April 2023. When she started, her onboarding documents did not include an arbitration agreement. About five months later, on February 20, 2022, she was asked to electronically sign additional employment documents, including an arbitration agreement, a voluntary dispute resolution policy, and a confidentiality and non-disclosure agreement (CND).
The arbitration agreement stated that most employment-related disputes between Gurganus and IGS would be resolved by final and binding arbitration, with both parties giving up their rights to a jury trial. However, it excluded certain claims from arbitration, such as those seeking injunctive or declaratory relief regarding the use or unauthorized disclosure of confidential information. The agreement also contained a confidentiality provision, restricting disclosure of information to parties not involved in the arbitration hearing unless written approval was given. Employees could opt out of the...
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