Tiny-Font Arbitration Upheld: Fuentes v. Empire Nissan

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In Fuentes v. Empire Nissan, Inc. (California Supreme Court, 2024), the justices confronted whether an otherwise fair employment arbitration agreement printed in tiny, nearly unreadable font—and presented on a take-it-or-leave-it basis—can be invalidated as unconscionable. Their answer clarifies how California courts must balance procedural versus substantive unfairness when employees challenge arbitration pacts.

The Case: Fuentes v. Empire Nissan, Inc.

The Court: California Second Appellate District Division Eight/L.A. County Superior Court

The Case No.: Appellate Case No.: B314490 / Superior Court Case No.: 20STCV35350

The History of the Case: Fuentes v. Empire Nissan, Inc.

Employment & Dispute: Plaintiff Maribel Fuentes worked for Empire Nissan. After her termination, she sued, alleging wage-and-hour and other statutory violations.

Trial Court (L.A. Superior): Nissan moved to compel arbitration. The Court found the one-page arbitration agreement unconscionable—largely because of its microscopic, blurred print—and denied the motion.

Court of Appeal (2d Dist.): Reversed. While the agreement showed procedural unconscionability (tiny font, adhesion contract), it contained no substantively unfair terms, so arbitration had to proceed.

California Supreme Court (2024): Granted review to resolve how far procedural flaws alone can go in invalidating an arbitration clause and ultimately affirmed the appellate ruling, reinforcing the two-part unconscionability test.

The Arbitration Agreement: Fuentes v. Empire Nissan, Inc.

To make a determination in the case, the Court considered various details in the arbitration agreement Nissan presented to Fuentes. Consider a summary of the details they considered below:

  • Format: Single one-page form, extremely small and blurry type, provided to all dealership hires on a take-it-or-leave-it basis.

  • Key Clauses: Key clauses appeared fair; deemed no substantive unconscionability.

  • Mutuality: Bound both the employee and the employer.

  • Scope & Governing Law: Covered statutory claims; incorporated California Arbitration Act procedures.

  • No Hidden Waivers: Did not waive EEOC/DFEH (now CRD) charges.

  • Employer Signature: Absence of Nissan’s signature went to contract formation; not substantive fairness.

  • Initiation Instructions: Reference to state arbitration rules was sufficient.

The procedural concerns identified included: 1) tiny, unreadable font, 2) presented as a condition of employment (adhesion), and 3) dense legalese.

The Main Issue: Fuentes v. Empire Nissan, Inc.

Does an employment arbitration agreement that is procedurally unconscionable—because of unreadable, tiny print and adhesive presentation—become unenforceable when its substantive terms are otherwise even-handed?

The Court said no. California’s “sliding-scale” test still demands some showing of substantive unconscionability; procedural flaws alone cannot be “double-counted” to tip the scale.

What Makes Fuentes v. Empire Nissan, Inc. a Landmark Case?

Fuentes cements the bright-line rule that both procedural and substantive unconscionability must be present to void an arbitration clause. Courts may not inflate procedural defects (e.g., illegible font, adhesion) into substantive ones simply to strike down agreements. In an era of rapidly evolving employment-arbitration law, Fuentes preserves a predictable framework, signaling that California workplaces must scrutinize not only how arbitration agreements are presented but also what they say; because only truly one-sided terms, combined with process flaws, will render them unenforceable.

FAQ: Fuentes v. Empire Nissan, Inc.

Q: What is the difference between procedural and substantive unconscionability?

A: Procedural unconscionability looks at how the contract was formed—e.g., tiny unreadable font or “take-it-or-leave-it” pressure. Substantive unconscionability examines what the contract says; checking if the content is unfairly skewed in favor of the employer. California requires both types to be present before a court can strike down an arbitration agreement.

Q: Does unreadable fine print, by itself, make an arbitration clause unenforceable?

A: No. Fuentes confirms that illegible or microscopic text is a procedural flaw only. Unless the agreement also contains substantively unfair terms—such as one-sided fee rules or damage caps—courts will still enforce it.

Q: My boss handed me a “sign-or-don’t-work” arbitration form. Is that automatically invalid?

A: Adhesion contracts (take-it-or-leave-it agreements) create procedural unconscionability, but California law still demands some substantive unfairness before voiding the clause. Review the substance for red flags (e.g., waiver of statutory rights) and consider seeking legal advice before refusing to sign.

Q: Does an arbitration agreement need the employer’s signature to bind both parties?

A: Not necessarily. Fuentes held that lack of an employer signature raises a formation question—whether a contract exists at all—but it is not evidence of substantive unconscionability. If both sides intended to be bound, courts generally treat the agreement as valid.

If you have questions about how to file a California employment law complaint, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Knowledgeable employment law attorneys are ready to help in various law firm offices in Riverside, San Francisco, Sacramento, San Diego, Los Angeles, and Chicago.