The panel reversed the district court’s judgment denying a motion to compel arbitration, vacated the judgment that the parties’ arbitration agreement was unconscionable, and remanded with instructions to grant the motion to compel arbitration.

The employment contract between the parties specified that any employment-related disputes be subject to arbitration under the Federal Arbitration Act in conformity with the procedures of the California Arbitration Act. The district court acknowledged that the arbitration agreement delegated the question of the agreement’s validity to an arbitrator to decide. The district court ruled, however, that where the contract contained a severability clause permitting a court to excise an unconscionable provision, the delegation clause did not constitute a clear and unmistakable delegation and thus could not be enforced.

The panel held that the district court misapplied federal law and erroneously relied on state-court decisions pointing to the existence of a severability clause to refuse to compel arbitration. The parties clearly and unmistakably agreed to have the arbitrator resolve any challenge to the validity of the arbitration agreement. The clear and unmistakable nature of the delegation was not negated by the presence of a severability clause. The panel rejected the district court’s attempt to adopt a state rule that disfavored arbitration here.

The panel also vacated the district court’s judgment that the parties’ arbitration agreement was unconscionable. The district court should not have addressed the issue in the first place, but instead should have enforced the delegation clause requiring an arbitrator’s resolution.

The panel remanded to the district court with instructions to grant the motion to compel arbitration and to stay the case pending the completion of arbitration proceedings.

https://cdn.ca9.uscourts.gov/datastore/opinions/2026/03/19/24-6623.pdf