9th Circuit Upholds Cocom v. ABM Aviation Arbitration Agreement in California
The 9th Circuit ruled in Cocom v. ABM Aviation that a narrowly tailored arbitration agreement is enforceable in California.
Why it matters: This ruling clarifies how narrowly scoped arbitration agreements can survive legal challenges, guiding employers and counsel when drafting dispute resolution clauses in California — a state known for scrutiny of arbitration agreements.
- June 23, 2026 decision by the U.S. Court of Appeals for the Ninth Circuit in Cocom v. ABM Aviation, Inc.
- Agreement limited explicitly to employment-related claims, aiding enforceability by restricting duration and scope.
- Court rejected that including third parties violated enforceability, allowing multiparty arbitration inclusion.
- Waiver of representative claims under California's Private Attorneys General Act (PAGA) was severable, preserving the rest of the agreement.
On June 23, 2026, the U.S. Court of Appeals for the Ninth Circuit upheld an employment arbitration agreement against unconscionability challenges in Cocom v. ABM Aviation, Inc.. This ruling centers on arbitration clauses under California law where courts often scrutinize such agreements for fairness.
The arbitration agreement was narrowly limited to disputes related specifically to employment claims. The court stressed this limitation "imposes an inherent limitation on the agreement's duration," helping to counter arguments that the agreement was unduly broad or oppressive. By defining the scope, the agreement avoided being deemed unconscionable.
Opponents contended that including third-party beneficiaries within the arbitration arrangement made the agreement unenforceable. The court disagreed, explaining that arbitration agreements including third parties are not per se invalid. This affirms that employers can organize multi-party arbitration frameworks without automatically risking unenforceability.
Another debated point was a clause preventing arbitration awards from having preclusive or precedential effect in future cases. The court upheld this clause, stating it aligns with California default rules and is not unconscionable. In legal terms, preventing "preclusive" effects means the arbitration outcome doesn’t automatically bar other claims, preserving procedural fairness.
The agreement also contained a waiver of representative claims under the California Private Attorneys General Act (PAGA), which permits employees to bring claims on behalf of the state. The court deemed this waiver severable—meaning it can be removed without invalidating the entire agreement. This leaves the rest of the arbitration provisions intact and enforceable.
This decision offers crucial guidance for California employers and legal teams drafting arbitration clauses. Precise language that narrows the scope and duration of arbitration provisions can reduce risks of courts finding the agreements unconscionable. The severability of PAGA waiver clauses remains uncertain but this ruling shows courts may preserve the overall agreement even if the waiver is invalidated.
Legal technology providers supporting arbitration management should consider that agreements with clear, limited scopes will more likely withstand legal challenges. Tools may need updating to reflect these evolving judicial standards.
For further reading, the National Law Review offers additional commentary on this ruling and its implications.
By the numbers:
- June 23, 2026 — Date of Ninth Circuit ruling in Cocom v. ABM Aviation, Inc.
- 21-15882 — Ninth Circuit case number for Cocom v. ABM Aviation.
- PAGA — California Private Attorneys General Act permitting representative employee claims.
Yes, but: While the court severed the PAGA waiver to preserve the arbitration agreement, PAGA waivers themselves remain controversial and may face invalidation in other cases, sustaining uncertainty for employers.
What's next: Expect further litigation clarifying enforceability of PAGA waivers and multiparty arbitration agreements in California. Legal counsel should monitor California appellate decisions closely.