On April 1, 2026, the Ninth Circuit handed California employers a meaningful win in O’Dell v. Aya Healthcare Services, Inc., No. 25-1528. The court reversed a Southern District of California ruling that had used a procedural doctrine—non-mutual offensive collateral estoppel—to invalidate arbitration agreements for more than 250 opt-in plaintiffs based on two prior arbitrator decisions finding the employer’s agreements unconscionable.
The decision matters because it closes off a tactic that could have allowed a small number of adverse arbitration outcomes to wipe out an employer’s entire arbitration program in a collective or class action. For California employers who have invested in arbitration agreements as a risk-management tool, the ruling reaffirms a foundational principle: each arbitration agreement stands or falls on its own terms.
Here are five practical takeaways for California employers.
1. Arbitration agreements must be evaluated individually, not in bulk.
The district court in O’Dell allowed two arbitrator rulings—each involving a different employee and a different arbitrator—to preclude Aya from enforcing hundreds of other arbitration agreements signed by opt-in plaintiffs. The Ninth Circuit rejected that approach, holding that the Federal Arbitration Act requires courts to enforce arbitration agreements according to their terms and that applying non-mutual offensive collateral estoppel in this context conflicts with the FAA’s core principle of consent.
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