A recent California Court of Appeal decision confirms that broadly worded arbitration agreements, even those covering “all claims,” can be enforceable when drafted and implemented properly. The case provides useful guidance for employers navigating the line between expansive coverage and unconscionability challenges. 

The Case 

In Ayala-Ventura v. Superior Court ( Fresno County), the court considered an arbitration agreement that required employees to arbitrate essentially all claims arising from the employment relationship. The employee challenged the agreement as overly broad and unconscionable, arguing that its sweeping scope made it unfair and unenforceable. 

The court disagreed and enforced the agreement. 

Key Takeaways 

1. “All claims” language is not inherently fatal
   The court rejected the notion that broad arbitration provisions are automatically invalid. While prior decisions have raised concerns about agreements that appear to extend indefinitely or cover unrelated future disputes, the court emphasized that context matters. Where the employer’s operations and the employment relationshipreasonably limit the scope of potential claims, broad language alone will not render an agreement unconscionable. 
2. Courts will assess real-world scope, not hypothetical extremes
   Rather than focusing on theoreticalpossibilities, the court evaluated whether the agreement realistically swept in unrelated or unforeseeable claims. It concluded that the agreement did not create the type of “infinite” exposure that would support a finding of substantive unconscionability.  
3. Traditional contract principles still control
   The decision reinforces that arbitration agreements are treated like any other contract. Under the Federal Arbitration Act, they are enforceable unless invalid undergenerally applicable contract defenses such as unconscionability. This means employers must still ensure fairness in both procedure and substance. 
4. Drafting and presentation remain critical
   The court pointed to several factors supporting enforceability:

• Clear, standalone agreement 

• Mutual obligations between employer and employee 

• Balanced procedures 

• Meaningful opportunity for the employee to review terms 

These factors continue to be central in defending arbitration agreements against challenge. 

What it Means for Employers 

This decision is a helpful reminder that employers can still use broad arbitration agreements to manage litigation risk, including wage and hour and class action claims. But breadth alone is not enough. 

Employers should focus on: 

• Clarity and readability 

• Mutuality of obligations 

• Avoiding one-sided carveouts 

• Providing a fair review process at onboarding 

Courts remain receptive to arbitration, but they are equally willing to scrutinize agreements that appear overreaching or procedurally unfair. 

Bottom Line 

A well-drafted arbitration agreement is highly recommended as it can cover a wide range of claims without running afoul of California law. The key is not how broad the language appears on paper, but whether the agreement operates fairly in practice and reflects a balanced employment relationship.