{"id":3349,"date":"2026-10-25T11:21:45","date_gmt":"2026-10-25T15:21:45","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=3349"},"modified":"2026-10-25T11:21:46","modified_gmt":"2026-10-25T15:21:46","slug":"california-court-of-appeal-finds-that-an-employment-arbitration-agreement-entered-into-freely-and-voluntarily-actually-was-forced-illegal-and-invalid-under-california-law","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/10\/25\/california-court-of-appeal-finds-that-an-employment-arbitration-agreement-entered-into-freely-and-voluntarily-actually-was-forced-illegal-and-invalid-under-california-law\/","title":{"rendered":"California Court Of Appeal Finds That An Employment Arbitration Agreement Entered Into \u201cFreely And Voluntarily\u201d Actually Was Forced, Illegal, And Invalid Under California Law"},"content":{"rendered":"
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By Eden E. Anderson, Rebecca Bjork, and Gerald L. Maatman, Jr.<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways:<\/strong> On October 22, 2026, the California Court of Appeal held <\/a>in Molina, et al. v. Triumph Residential Services, Inc., Case No. B350252, that requiring an employee to sign an arbitration agreement as a condition of employment is illegal under California Labor Code section 432.6.\u00a0 Thus, when an arbitration agreement is not otherwise enforceable under the FAA, an arbitration agreement that is a condition of employment is unenforceable under California law.\u00a0 The Court of Appeal further found that, even though the arbitration agreement at issue stated on its face that it was voluntary, it actually was not.\u00a0<\/em><\/p>\n\n\n\n

The Molina decision is a must read for any employer seeking to compel arbitration under California law, as it teaches important lessons on the evidence an employer should submit with its motion. <\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

At the time of her hire with Triumph Residential Services (Triumph), Tiffany Molina signed an arbitration agreement which stated that she was \u201cfreely and voluntarily\u201d agreeing to arbitration of claims arising out of her employment.  Id<\/em>. at 4.  After her employment ended, Ms. Molina filed a wage and hour class action lawsuit against Triumph.  Triumph moved to compel individual arbitration and to dismiss the class claims pursuant to a class action waiver in the arbitration agreement.  The parties agreed that their arbitration agreement was not governed by the Federal Arbitration Act (FAA), and thus Triumph sought to enforce the arbitration agreement under California law.  With its motion to compel, Triumph submitted a declaration asserting that Ms. Molina \u201cwas free to accept the Arbitration Agreement, attempt to negotiate out of it or look for other employment.\u201d  Id<\/em>. at 4.<\/p>\n\n\n\n

In opposing the motion, Ms. Molina argued that California Labor Code section 432.6 made her arbitration agreement unlawful.  Labor Code section 432.6 makes it illegal (indeed, criminal) for an employer to impose an arbitration agreement on an employee as a \u201ccondition of employment.\u201d  It also prohibits an employer from requiring an employee to take any affirmative action to opt out of an arbitration agreement.  Usually, when the FAA governs an arbitration agreement, Labor Code section 432.6 is preempted.  However, as noted, here the parties agreed the FAA did not apply.  Ms. Molina asserted, without any evidentiary support of her own, that her arbitration agreement had been forced upon her as a condition of employment. <\/p>\n\n\n\n

The trial court denied Triumph\u2019s motion, concluding that Labor Code section 432.6 invalidated the arbitration agreement.  Even though the arbitration agreement on its face stated it was \u201cfreely and voluntarily\u201d signed, the trial court deemed that insufficient to show the agreement was voluntary and not a condition of employment.  It determined that the employer bears the burden of proof to establish a valid an enforceable agreement to arbitrate, and that Triumph failed to offer evidence that its employees were not required to sign the arbitration agreement. <\/p>\n\n\n\n

The Decision<\/strong><\/p>\n\n\n\n

In a decision certified for publication, the Court of Appeal affirmed.  It held that the only exception to Labor Code section 432.6\u2019s application is when an arbitration agreement is otherwise enforceable under the FAA.  Because Ms. Molina\u2019s arbitration agreement was not enforceable under the FAA, then the agreement had to be voluntary to be enforceable under California law. <\/p>\n\n\n\n

Without addressing which party bears the burden of proof, the Court of Appeal further held that the evidence established Ms. Molina\u2019s arbitration agreement was not voluntary even though it said on its face that it was.  And on this point, Triumph\u2019s declaration proved fatal because it stated that Ms. Molina\u2019s choices were to either \u201caccept the Arbitration Agreement . . . or look for other employment.\u201d  Id<\/em>. at 4.  That meant the agreement was unlawfully a condition of employment.  Id.<\/em> at 15.  Additionally, Triumph\u2019s declaration stated that Ms. Molina could \u201cnegotiate out of\u201d the agreement, which too violated Labor Code section 432.6 because it signified that Ms. Molina had to take affirmative action to avoid signing the arbitration agreement presented to her.  Id<\/em>.  Because Ms. Molina\u2019s arbitration agreement was not voluntary and not enforceable under the FAA, it was \u201cillegal (indeed, criminal)\u201d and unenforceable under California law.  Id.<\/em> at 8.<\/p>\n\n\n\n

Implications For Employers<\/strong><\/p>\n\n\n\n

The Molina<\/em> decision teaches an important lesson to any employer seeking to enforce an arbitration agreement that is not governed by the FAA.  Even if an arbitration agreement states that it is voluntary, the employer should proffer additional evidence to confirm that employees are not required to sign, e.g., a declaration indicating that some employees do not sign.  In this instance, the employer offered a declaration stating the exact opposite, and sandbagged its own motion as a result. <\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By Eden E. Anderson, Rebecca Bjork, and Gerald L. Maatman, Jr. Duane Morris Takeaways: On October 22, 2026, the California Court of Appeal held in Molina, et al. v. Triumph Residential Services, Inc., Case No. B350252, that requiring an employee to sign an arbitration agreement as a condition of employment is illegal under California Labor … <\/p>\n

Continue reading “California Court Of Appeal Finds That An Employment Arbitration Agreement Entered Into \u201cFreely And Voluntarily\u201d Actually Was Forced, Illegal, And Invalid Under California Law”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[7,92,11],"class_list":["post-3349","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","author_category":"","last_name":"Maatman Jr.","first_name":"Gerald L.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/geraldmaatman.html","description":"Read Gerald's bio.<\/a>"},{"term_id":92,"user_id":651,"is_guest":0,"slug":"eeanderson","display_name":"Eden Anderson","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/07\/andersoneden-100x100.jpg","author_category":"","last_name":"Anderson","first_name":"Eden","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/edeneanderson.html","description":"Read Eden's Bio<\/A>"},{"term_id":11,"user_id":579,"is_guest":0,"slug":"rsbjork","display_name":"Rebecca S. Bjork","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/bjorkrebecca-100x100.jpg","author_category":"","last_name":"Bjork","first_name":"Rebecca S.","job_title":"","user_url":"","description":"Read Rebecca's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=3349"}],"version-history":[{"count":1,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3349\/revisions"}],"predecessor-version":[{"id":3352,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3349\/revisions\/3352"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=3349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=3349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=3349"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=3349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}