The Supreme Court of California, in the recent case Fuentes v. Empire Nissan, Inc. (Fuentes), held that small blurry print in an arbitration agreement was not enough to support a valid claim of unconscionability under California law. In Fuentes, an employee applicant signed the company’s arbitration agreement even though the font size was tiny, blurry and the document contained complex, jargon-heavy language. After a termination following a medical leave of absence, the employee sued and opposed the employer’s motion to compel arbitration by claiming the signed agreement was unconscionable.  

To establish that a contract is unenforceable because it is unconscionable, the party opposing enforcement must show unfairness both in the procedure by which the contract was formed and the substance of its terms. In reviewing the Fuentes case, the Court found that a contract’s format, such as illegibility, is generally irrelevant to substantive unconscionability, which concerns the fairness of the contract’s terms. However, the Court did clarify that courts must more closely scrutinize the terms of contracts that are difficult to read for unfairness or one-sidedness when there is high procedural unconscionability. It also found the Court of Appeal improperly relied on a pro‑arbitration presumption and cut off consideration of unresolved factual issues about contract formation. The Supreme Court reversed and remanded for further proceedings. 

Given the Court’s holding, employers should consider the following best practices when drafting and implementing arbitration agreements:  

• Ensure substantively fair arbitration terms. Courts focus on whether the terms are balanced – not formatting alone – but will scrutinize fairness more closely when agreements are imposed through standardized hiring processes.  

• Reduce procedural unconscionability during hiring. Seasonal and high-volume onboarding increases risk; allowing time to review and clearly presenting arbitration agreements helps demonstrate fairness.  

• Use clear, readable agreements for a diverse workforce. Small or blurry print alone is not fatal, but difficult to read agreements invite closer judicial review – especially where workers have varying language proficiencies.  

• Assume Close Judicial Review. Draft arbitration agreements conservatively, with the expectation that a court may review them line by line. Provisions that appear even modestly one-sided may be vulnerable when applied to agricultural employment relationships.