US Ninth Circuit upholds employment arbitration agreement against unconscionability challenge where scope was limited to employment-related claims

The US Court of Appeals for the Ninth Circuit has ruled that an employment arbitration agreement was enforceable and not unconscionable, in a decision handed down on 23 June 2026 in *Cocom*. The court rejected the plaintiff-appellee's argument that the agreement was unconscionable, finding that its scope was expressly limited to employment-related claims rather than applying to all potential claims a party might have against the employer. Central to the ruling was the court's finding that the limited scope of the agreement — covering only employment claims — necessarily restricted its duration and application, particularly with respect to potential claims arising outside the employment context involving covered third parties. The Ninth Circuit suggested the result might differ for an arbitration agreement covering an employer with numerous businesses, where claims unrelated to employment could more plausibly arise. Arbitration agreements in employment contexts remain a contested area across common law jurisdictions, including England and Wales, where courts scrutinise the scope and fairness of dispute resolution clauses. The decision reinforces the principle that targeted, scope-limited arbitration clauses are more likely to survive enforceability challenges than broadly drafted ones.