The original headline is about California employers facing challenges enforcing arbitration agreements, with a specific court case.

Short summary

The California Court of Appeal in Phan v. Knight Sacramento SU Inc. (2026) upheld the invalidation of an employer's arbitration agreement on unconscionability grounds, citing its take-it-or-leave-it nature, overly broad scope, and lack of mutuality for third-party beneficiaries. The court refused to sever unconscionable provisions, finding the agreement's central purpose tainted. Employers should regularly review and revise arbitration agreements to avoid similar outcomes.

• •Phan v. Knight Sacramento invalidated an arbitration agreement for procedural and substantive unconscionability
• •Overly broad scope and one-sided third-party beneficiary provisions were key defects
• •Court refused severance, finding the central purpose of the agreement tainted

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