What's Happening?
On June 23, 2026, the Ninth Circuit Court of Appeals ruled in favor of ABM Aviation in the case of Cocom v. ABM Aviation, reversing a lower court's decision that refused to compel arbitration. The appellate court found that the arbitration agreement in question
was not substantively unconscionable and was enforceable, as it was specifically tailored to address employment-related claims. This decision highlights the importance of clearly defining the scope of arbitration agreements to focus solely on employment disputes, thereby avoiding the pitfalls of overly broad agreements that can be challenged in court. The court emphasized that the language used in the Cocom agreement, which included terms like 'including but not limited to' in reference to employment claims, was appropriately limited to employment-related issues such as breach of contract and wrongful termination.
Why It's Important?
The ruling in Cocom v. ABM Aviation is significant for employers as it provides a legal framework for drafting arbitration agreements that can withstand judicial scrutiny. By focusing on employment-related claims, the decision offers a blueprint for employers to avoid the legal challenges that arise from overly broad arbitration agreements. This case underscores the necessity for employers to clearly define the scope of claims covered by arbitration agreements and to adopt industry-standard arbitration rules, which can help ensure that such agreements are enforceable. The decision also highlights the importance of mutuality and severability in arbitration agreements, which can protect employers from claims of unconscionability and ensure that the core purpose of the agreement is preserved.
What's Next?
Employers are likely to review and potentially revise their arbitration agreements in light of the Cocom decision to ensure compliance with the legal standards set forth by the Ninth Circuit. Legal experts may advise companies to incorporate specific language that limits arbitration to employment-related disputes and to include provisions that allow for severability of any unconscionable terms. This ruling may also prompt further legal challenges as employees and employers navigate the complexities of arbitration agreements, potentially leading to additional clarifications in future court decisions.
