Can Your Employer Force You Into Arbitration If the Agreement Was Too Small and Blurry to Read When You Signed It?
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The California Supreme Court addressed that question directly in a case involving a car dealership employee whose arbitration agreement was printed in font so small and blurry it was described as "nearly unreadable." The answer: not automatically — and the ruling reshapes how California courts evaluate the enforceability of arbitration agreements signed under rushed, high-pressure conditions.
Case: Fuentes v. Empire Nissan, Inc.
Court: Supreme Court of California
Case No.: S280256 (Los Angeles County Superior Court No. 20STCV35350)
Get to Know the Plaintiff: Fuentes v. Empire Nissan
Evangelina Yanez Fuentes applied for a job at Empire Nissan and, as part of the onboarding process, was handed an employment application packet. She was given approximately five minutes to review the entire packet before being sent to take a drug test. The packet included an "Applicant Statement and Agreement" containing a mandatory arbitration provision — approximately 900 words compressed into a few vertical inches of text in very small, blurry font, including one sentence that ran 214 words long. She was not given an opportunity to ask questions and did not receive a copy of the document after signing it. She also signed two confidentiality agreements that appeared to allow Empire Nissan to seek court remedies for certain claims, without mentioning arbitration.
After working at the dealership for approximately two and a half years, Fuentes requested an extension of her medical leave for cancer treatment. Empire Nissan terminated her employment. She filed suit for wrongful discharge and related claims. Empire Nissan moved to compel her into private arbitration based on the barely legible agreement she had signed on her first day.
Get to Know the Defendant: Fuentes v. Empire Nissan
Empire Nissan, Inc. is a California car dealership that required job applicants and employees to sign a mandatory arbitration agreement as a condition of employment. The arbitration provision at the center of this case was embedded in a multi-page onboarding packet, presented to Fuentes under time pressure, and formatted in text so small and broken that it was, in the California Supreme Court's words, "nearly unreadable." The accompanying confidentiality agreements also appeared to carve out certain claims — specifically those involving unfair competition and trade secrets — in a way that favored Empire Nissan's ability to seek judicial remedies while requiring employees to arbitrate.
What Are the Allegations in the Complaint?
Fuentes's lawsuit arose from her termination following her request for extended medical leave for cancer treatment. According to the complaint and subsequent proceedings:
Fuentes was terminated after requesting extended medical leave to continue cancer treatment, and alleges her termination constituted wrongful discharge and related violations of California law
She argued the arbitration agreement was unenforceable both because it was procedurally unconscionable — presented in an illegible format under severe time pressure with no opportunity to review or negotiate — and because its terms were substantively unconscionable, particularly the confidentiality agreements' apparent one-sided carve-out allowing Empire Nissan to seek judicial remedies for its own claims while requiring employees to arbitrate theirs
The trial court found a high degree of procedural unconscionability and a low-to-moderate degree of substantive unconscionability, and denied the motion to compel arbitration
The Court of Appeal reversed, finding illegibility only affects procedural — not substantive — unconscionability, and finding no substantive unconscionability at all
The California Supreme Court reversed the Court of Appeal and sent the case back to the trial court for re-evaluation
What Was the Main Question in the Case?
The Supreme Court addressed two core questions. First: does a contract's illegibility or unreadable formatting affect substantive unconscionability — meaning, does it make the terms themselves unfair? The court answered no: illegibility generally affects how a contract was presented (procedural unconscionability), not the substance of its terms. Second — and more consequentially for employees — the court held that when a contract is marked by a high degree of procedural unconscionability, courts must closely scrutinize its terms for fairness or one-sidedness. The worse the conditions under which an employee was asked to sign, the more carefully a court must examine what that employee actually agreed to. The court also held that any ambiguities in the agreement must be construed against Empire Nissan as the drafting party. The case was remanded to the trial court to re-evaluate the agreement's enforceability under this correct framework.
Why Does the Case Matter to California Employees?
This is a landmark California Supreme Court ruling that directly affects the rights of the millions of California workers who have signed arbitration agreements as a condition of employment.
The ruling confirms that employees who were handed an illegible, nearly unreadable arbitration agreement under time pressure — with no ability to review, negotiate, or ask questions — may have strong grounds to challenge it
The higher the degree of procedural unconscionability (rushed presentation, fine print, no negotiation), the more carefully courts must examine whether the terms of the agreement are also one-sided or unfair
Courts in California can no longer defer to a general presumption favoring arbitration when evaluating whether a rushed, illegible agreement is enforceable — fairness to the employee matters
The decision is relevant to anyone who has signed an employment contract, arbitration agreement, or onboarding document in the car industry, retail, hospitality, or any other sector where take-it-or-leave-it agreements are common
A Brief Overview of the Case
Application/onboarding: Fuentes is hired at Empire Nissan and given five minutes to review an onboarding packet containing a nearly unreadable mandatory arbitration clause; she signs without being able to review it and receives no copy
After approximately 2.5 years: Fuentes requests extended medical leave for cancer treatment; Empire Nissan terminates her employment
Fuentes files suit: Lawsuit filed in Los Angeles County Superior Court (Case No. 20STCV35350) for wrongful discharge and related claims; Empire Nissan moves to compel arbitration
Trial court: Denies motion to compel arbitration, finding both procedural and substantive unconscionability
Court of Appeal: Reverses, finding only procedural unconscionability (from illegibility) and no substantive unconscionability; orders arbitration
February 2, 2026: California Supreme Court (Case No. S280256) reverses the Court of Appeal; holds that when there is a high degree of procedural unconscionability, courts must closely scrutinize the terms for substantive unfairness; ambiguities construed against the drafter; case remanded for re-evaluation under the correct framework
FAQs: Fuentes v. Empire Nissan
Q: What is unconscionability and how does it apply to arbitration agreements?
A: Unconscionability is a legal doctrine that allows courts to refuse to enforce a contract or a contract provision that is both procedurally unfair (in how it was presented) and substantively unfair (in its actual terms). California law requires both elements to be present to invalidate a contract as unconscionable.
Q: What is procedural unconscionability?
A: Procedural unconscionability focuses on how the contract was formed — specifically, whether the weaker party had a meaningful opportunity to understand and negotiate its terms. In employment contracts, this often involves high-pressure signing conditions, illegible formatting, no opportunity to ask questions, and the take-it-or-leave-it nature of a job offer.
Q: What is substantive unconscionability?
A: Substantive unconscionability focuses on the actual terms of the contract — whether they are unreasonably one-sided or unfair to one party. In employment arbitration agreements, this can include provisions that allow the employer to go to court for certain claims while requiring employees to arbitrate all of theirs.
Q: I signed an arbitration agreement without really reading it. Can I still challenge it?
A: Possibly, depending on the circumstances. The conditions under which you signed — including whether you had time to review it, whether it was legible, whether you had a chance to ask questions, and what the agreement's terms actually say — all factor into whether it can be challenged. A California employment attorney can evaluate your specific agreement.
Q: Does the Supreme Court's ruling mean Fuentes won her case?
A: Not yet. The ruling sent the case back to the trial court to re-evaluate the arbitration agreement under the correct legal framework. The ultimate question of whether she was wrongfully terminated has not been decided.
Q: What should I look for in an arbitration agreement before I sign it?
A: Key red flags include: one-sided provisions that allow the employer to go to court for its own claims while requiring you to arbitrate; very short review times; illegible or densely formatted text; no copy provided after signing; and class action waivers that prevent you from joining a group claim against the employer.
Did You Sign an Arbitration Agreement You Couldn't Read or Couldn't Fully Review?
Fuentes v. Empire Nissan is a powerful reminder that California courts will not simply rubber-stamp arbitration agreements that were rushed, illegible, or one-sided — and that employees have real rights to challenge those agreements. If you signed an employment agreement that you believe is unfair or unenforceable, contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to assist you in law firm offices located in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.
