Zakay Law Group Secures Appellate Win on Worker Arbitration Agreements

Zakay Law Group, APLC announced on July 16, 2026, a victory before the California Court of Appeal, Third Appellate District. The appellate court affirmed a lower court's ruling that an employer's mandatory arbitration agreement was unconscionable and unenforceable.

The case involved a former employee who filed a wage-and-hour class action lawsuit against Knight Sacramento SU Inc. The employer sought to compel individual arbitration and dismiss the class action claims, citing arbitration agreements signed by the employee.

The Court of Appeal found the arbitration agreement to be substantively unconscionable. The court determined that the agreement required the employee to arbitrate virtually any claim, including those unrelated to employment, against the company and a broad list of third parties. Crucially, the agreement imposed no reciprocal obligation on these third parties to arbitrate claims against the employee.

Applying precedent, the Court of Appeal declined to sever the offending terms, allowing the employee's class action to proceed in court. The published decision sets binding precedent within its district and is persuasive statewide.

Zakay Law Group represents California employees in wage-and-hour class actions and PAGA claims. The firm offers free consultations to employees with questions about arbitration agreements or wage disputes.