If you signed an arbitration agreement

Practical guide · Procedure · Revised February 2026

What arbitration changes, what it cannot change, and the federal law that lets sexual-harassment claims stay in court.

First, three facts. Signing it was almost certainly a condition of the job, and you are not foolish for having signed — that is how these agreements arrive. An arbitration agreement changes where your case is heard, not what your rights are. And “I signed something” is the beginning of an analysis, never the end of one: these agreements fail more often than employers let on.

1 · What arbitration actually changes

Three things, mainly. The forum: a private arbitrator — typically a retired judge — instead of a jury. The procedure: leaner discovery, quicker calendar, and as a practical matter no appeal. The visibility: no public courtroom, no public docket. Employers prefer this bundle for reasons that are not mysterious, and workers should understand it clearly: the loss of a jury and the loss of appellate review are real losses. They are also not the whole story.

2 · What it cannot change

California conditioned the enforceability of employment arbitration on a floor of protections, set in Armendariz a quarter-century ago: the agreement must allow every remedy the statute allows, provide adequate discovery, require a neutral arbitrator and a written decision, and — critically — the employer must pay the costs unique to arbitration.¹ The forum fees are theirs, not yours. Any agreement that limits your damages, shortens your deadlines, or splits the arbitrator’s bill with you is defective on its face, and defects have consequences. The scrutiny is practical, not abstract: in 2026 the Supreme Court reaffirmed that even the physical form of the contract matters — print too small to read is itself procedural unconscionability (Fuentes v. Empire Nissan (2026)).¹

And some things survive any agreement, because they never belonged to the employer to take: your right to file charges with the EEOC, the Civil Rights Department, or the Labor Commissioner; unemployment benefits; workers’ compensation. An arbitration agreement moves lawsuits. It does not repeal agencies.

3 · The sexual-harassment exception is an exception in your favor

Since March 2022, federal law — the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act — gives a person asserting sexual assault or sexual harassment claims the election to void a predispute arbitration agreement and proceed in court.² The election belongs to you, not the employer, and courts have frequently read it to keep the whole case in court where the harassment claims are part of it. If your dispute includes harassment of this kind, do not assume the agreement controls anything. It very likely does not.

4 · The fee rule with teeth

California also polices the arbitration the employer chose. Under Code of Civil Procedure sections 1281.97 and 1281.98, the employer must pay its arbitration fees within thirty days of the due date; a drafting party that does not is in material breach, and you may withdraw the case to court. In 2025 the Supreme Court upheld section 1281.98 against a federal preemption challenge in Hohenshelt v. Superior Court — while rejecting the most rigid readings of the rule, so the deadline is enforced as a serious obligation rather than a gotcha.³ The practical point for you: an employer that compels arbitration and then slow-pays for it can forfeit the forum it demanded. We calendar these dates in every arbitrated case.

5 · Agreements still fail the old-fashioned way

Unconscionability is alive. In OTO v. Kho, the Supreme Court refused to enforce an agreement presented in a dense, tiny-print paragraph, in circumstances that gave the employee no real chance to review it — procedure and substance weighed together, on a sliding scale.⁴ How the agreement reached you matters: handed over mid-shift, no copy provided, no translation in a workplace where one was plainly needed, buried in an onboarding stack. Save the story of the signing; it can decide the motion.

6 · What this means for your case, practically

Bring the agreement with everything else — do not pre-conclude anything from it. When we evaluate a matter with an arbitration agreement attached, we read for four things in order: does the EFAA take the case out entirely; does the agreement fail Armendariz or OTO; what does it actually cover and who does it bind; and, if arbitration it is, how the case should be built for a bench-style decision-maker — which changes emphasis, not merit. Strong cases remain strong in arbitration. They are simply tried to a different reader.

One more honest sentence, because the folklore runs both ways: arbitration is not a death sentence for employee claims, and anyone who tells you your case is worthless because you signed is doing the employer’s work for it.

If there is an agreement in your drawer and a dispute on your desk, send us both. The order we read them in may surprise you.

1. Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83.
2. 9 U.S.C. §§401–402.
3. Code Civ. Proc. §§1281.97, 1281.98; Hohenshelt v. Superior Court (2025) — opinion by Liu, J., filed August 11, 2025.
4. OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111.

Related writing: The severance agreement on your kitchen table · Four years of Lawson v. PPG

This article states California law as of its revision date and is analysis, not legal advice. Reading this site does not create an attorney-client relationship. Attorney advertising.