Filed 8/3/26
CERTIFIED FOR PARTIAL PUBLICATION*
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JEFFREY CLUCK, D087341
Plaintiff and Respondent,
(San Bernardino Super. Ct.
v. Nos. CIVSB2333305, CIVSB2416146)
GEO SECURE SERVICES, LLC, et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of San Bernardino
County, Jeffrey R. Erickson, Judge. Affirmed.
Akerman, Damien P. DeLaney and Thea Alli, for Defendants and
Appellants.
Wilshire Law Firm, John G. Yslas, Jeffrey C. Bils and Edward Kim,
for Plaintiff and Respondent.
* Pursuant to California Rules of Court, rule 8.1110, this opinion is
certified for publication with the exception of part E. of the Discussion.
Defendants The GEO Group, Inc. and GEO Secure Services, LLC
(collectively, GEO) appeal from an order denying their motion to compel
arbitration of wage and hour claims asserted by plaintiff Jeffrey Cluck in
a putative class action. The trial court refused to enforce the arbitration
agreement Cluck signed upon his hiring, finding the agreement
unconscionable. We ultimately arrive at the same conclusion, though we
rest our determination of unconscionability on slightly different grounds.
In light of Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93 (Fuentes),
decided while this appeal was pending, we find the arbitration agreement
must be read together with a confidentiality agreement Cluck also signed
during his hiring. In doing so, it is apparent that the agreement to arbitrate
was unfairly one-sided—compelling Cluck to submit his claims to arbitration
while permitting GEO to seek relief for the claims it is most likely to bring
against Cluck in court in Florida. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
GEO Secure Services, LLC—a wholly owned subsidiary of The GEO
Group, Inc.—is a private contractor that provides housing and transportation
services for criminal offenders in federal custody on behalf of various
government agencies. GEO hired Jeffrey Cluck to work at its El Centro
detention facility in July 2022. Pursuant to its regular “onboarding process,”
GEO gave Cluck a two-page Arbitration Agreement to sign. Cluck
electronically signed the agreement on July 28, 2022. It generally provided
for binding arbitration of all disputes arising out of or related to Cluck’s
employment with GEO. It included an opt-out provision that requires the
employee to send a letter to GEO’s legal department via mail or fax within
30 days.
2
On the same date, Cluck also electronically signed The GEO Group
Confidentiality Agreement (Confidentiality Agreement). In this agreement,
Cluck made a series of promises geared toward maintaining GEO’s
“competitive advantage” in its line of business. These include agreeing
not to use company computers to compete, to assign relevant intellectual
property to the company, not to solicit its employees to work for a competitor,
and “not to engage in any unauthorized use or disclosure of” Confidential
Information—for example, GEO’s financial information, contacts, and trade
secrets. The agreement provided that any breach “will cause irreparable
harm” to GEO and so it “will be entitled to” special remedies. It further
specified that “any dispute arising from or related to this Agreement” would
be resolved “in a court of law, sitting without a jury,” in Florida.
In December 2023, Cluck and Susan Knight filed a putative class
action alleging various wage and hour violations. In response, GEO moved to
compel arbitration of Cluck’s claims and dismiss him from the action.1 Cluck
opposed the motion to compel, contending the Arbitration and Confidentiality
Agreements, taken together, are unconscionable and thus unenforceable.
The trial court denied the motion to compel. It declined to read the
Arbitration and Confidentiality Agreements together. In its view, the
agreements did not govern the same issue, since “[n]othing in the
[Confidentiality Agreement] indicates it pertains to resolving disputes
arising out of Cluck’s employment with” GEO. It nevertheless found the
Arbitration Agreement, standing alone, was unconscionable. As to
procedural unconscionability, the court noted that the agreement failed to
1 GEO did not direct its motion at coplaintiff Susan Knight because she
apparently opted out of the Arbitration Agreement.
3
provide for “more than minimal discovery” insofar as the agreement stated
that “ ‘[d]iscovery will be conducted in accordance with the [American
Arbitration Association (AAA)] Rules,’ ” but GEO did not furnish a copy of
the AAA Rules for employment arbitration. The court also found substantive
unconscionability on two points. First, it read the agreement as unfairly
requiring Cluck to arbitrate his claims against the “Company”—defined to
include 16 different entities—as well as its agents, employees, affiliates,
successors, subsidiaries, assigns, and parent companies, but not requiring
those related entities to arbitrate their claims against Cluck. Second, the
court discerned a “high degree” of substantive unconscionability in the failure
of the agreement to “carve out sexual harassment or sexual assault claims
which cannot be compelled to arbitration under the” Ending Forced
Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (Pub.L.
117-90 (Mar. 3, 2022) 136 Stat. 26; see 9 USC §§ 401–402).
GEO timely appealed. While the appeal was pending, the Supreme
Court decided Fuentes, supra, 19 Cal.5th 93, which discussed the interplay
between an arbitration agreement and a confidentiality agreement in
assessing substantive unconscionability. At our request, the parties
submitted supplemental briefs addressing Fuentes.
DISCUSSION
GEO agrees with the trial court that the Arbitration and
Confidentiality Agreements should not be read together, contending the
court’s finding that the agreements did not concern the same issue is
supported by the agreements’ text. At the same time, GEO takes issue
with the court’s unconscionability analysis. Regarding procedural
unconscionability, GEO contests the court’s evaluation of the discovery
provision and additionally emphasizes that the agreement allowed Cluck
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to opt out. As for substantive unconscionability, GEO maintains the
agreement to arbitrate was fully mutual—even if taken together with the
Confidentiality Agreement—and properly excluded sexual harassment and
assault claims. Finally, GEO insists that any unconscionable provisions
should be severed from the agreements, consistent with the severability
clauses in each agreement.
Like the trial court, we conclude that the agreement to arbitrate is
unconscionable, though for different reasons. In our view, the agreement
bears some procedural unfairness as it is a contract of adhesion imposed by
an employer upon a newly hired employee, and the opt-out provision is too
cumbersome to appreciably lessen its oppressiveness. Furthermore, in the
wake of Fuentes—which was filed after the trial court’s ruling—we find the
Arbitration and Confidentiality Agreements must be construed together.
Upon closely examining these agreements as a whole, we conclude they
unfairly mandate arbitration of Cluck’s claims against GEO while GEO is
permitted to pursue its most likely claims—a breach of its confidentiality,
noncompete, and nonsolicitation policies—in court. Because this imbalance
rests at the core of the overall agreement, and because we do not condone
GEO’s practices here, it would not be in the interest of justice to enforce the
agreement to arbitrate in whole or in part.2
2 For these reasons, it is unnecessary for us to address the discovery
provision, any lack of mutuality in the Arbitration Agreement alone, or
whether sexual assault and harassment claims were properly excluded.
5
A. General Principles of Unconscionability
“ ‘A contract is unconscionable if one of the parties lacked a meaningful
choice in deciding whether to agree and the contract contains terms that are
unreasonably favorable to the other party.’ ” (Fuentes, supra, 19 Cal.5th at
pp. 102–103.) The procedural component of unconscionability “concerns ‘the
circumstances of contract negotiation and formation,’ particularly ‘oppression
or surprise due to unequal bargaining power.’ ” (Id. at p. 103.) In this
context, oppression refers to a lack of negotiation and meaningful choice;
surprise occurs when an agreement is difficult to understand, such as when
it is full of dense, small-print legalese. (Id. at p. 104.) The substantive aspect
of unconscionability “concerns ‘the fairness of an agreement’s actual terms,’
i.e., whether those terms ‘are overly harsh or one-sided.’ ” (Id. at p. 103.)
“ ‘Both procedural and substantive elements must be present to
conclude a term is unconscionable, but these required elements need not be
present to the same degree.’ Courts ‘apply a sliding scale analysis under
which “the more substantively oppressive [a] term, the less evidence of
procedural unconscionability is required to come to the conclusion that the
term is unenforceable, and vice versa.” ’ ” (Fuentes, supra, 19 Cal.5th at
p. 103, citations omitted.) “The party resisting enforcement of an arbitration
agreement has the burden to establish unconscionability.” (Ramirez v.
Charter Communications, Inc. (2024) 16 Cal.5th 478, 492 (Ramirez).) Where,
as here, the unconscionability of an arbitration agreement does not turn on
the resolution of factual disputes, our review is de novo. (Id. at p. 493.)
6
B. Procedural Unconscionability
“[T]here are degrees of procedural unconscionability. At one end of the
spectrum are contracts that have been freely negotiated by roughly equal
parties, in which there is no procedural unconscionability.” (Gentry v.
Superior Court (2007) 42 Cal.4th 443, 469 (Gentry).) “Contracts of adhesion
that involve surprise or other sharp practices lie on the other end of the
spectrum.” (Ibid.; see also Ramirez, supra, 16 Cal.5th at p. 492 [a contract
of adhesion is a “ ‘standardized contract which, imposed and drafted by the
party of superior bargaining strength, relegates to the subscribing party only
the opportunity to adhere to the contract or reject it’ ”].) Ordinary contracts
of adhesion “contain a degree of procedural unconscionability even without
any notable surprises, and ‘bear within them the clear danger of oppression
and overreaching.’ ” (Gentry, at p. 469.) We “ ‘must be “particularly attuned”
to this danger in the employment setting,’ ” in which the employee faces
acute economic pressure. (Ramirez, at p. 494.) “Thus, although adhesion
alone generally indicates only a low degree of procedural unconscionability,
the potential for overreaching in the employment context warrants close
scrutiny of the contract’s terms.” (Ibid.)
Here, it is undisputed that the Arbitration Agreement is a generic
document that GEO drafted and presents to all new employees during its
regular onboarding process. GEO nevertheless maintains the agreement
is not adhesive because it contains an opt-out provision:
“3. Your Right to Opt Out of Arbitration. Arbitration
is not a mandatory condition of your employment
at the Company, and therefore you may submit a
statement notifying the Company that you wish to
opt out and not be subject to this Agreement. In
order to opt out, you must notify the Company’s Legal
Department at [address] or [fax number] that you are
7
opting out in a signed and dated statement that includes
your name and employee number. In order to be effective,
your opt out notice must be provided within 30 days of
your receipt of this Agreement. If you opt out as provided
in this paragraph, you will not be subject to any adverse
employment action as a consequence of that decision and
may pursue available legal remedies without regard to this
Agreement. If you do not opt out within 30 days of your
receipt of this Agreement, continuing your employment
constitutes mutual acceptance of the terms of this
Agreement by you and the Company. You have the right
to consult with counsel of your choice concerning this
Agreement.”
To be sure, an opt-out provision tends to undercut a finding of
procedural unconscionability. (Gentry, supra, 42 Cal.4th at p. 470.) But
at the same time, an opt-out provision does not automatically insulate an
arbitration agreement from such a finding. (Swain v. LaserAway Medical
Group, Inc. (2020) 57 Cal.App.5th 59, 69.) The overarching question remains
whether Cluck had a “ ‘meaningful choice in deciding whether to agree’ ” to
arbitrate (Fuentes, supra, 19 Cal.5th at pp. 102–103), so we must examine
the circumstances under which he made this decision, including the nature
of the opt out procedure (see Gentry, at pp. 470–472; Swain, at p. 68).
In this case, the procedure to opt out of the Arbitration Agreement
was sufficiently cumbersome that it did not meaningfully mitigate the
procedural unconscionability. The agreement did not state that Cluck’s
signature was optional, nor did it include a check box allowing him to simply
opt out. Instead, the form provided a single signature line for “AGREED
AND RECEIVED,” implicitly directing Cluck to opt in. Then, if he wished to
opt out, he would have to wait to receive an employee identification number,
draft an opt out “statement,” and mail or fax the statement to Florida, all
within the first 30 days of starting a new job. In steering all new workers to
8
agree to arbitrate as the default and then take several convoluted steps to opt
out, GEO did not offer a simple, genuine, and realistic choice to the vast
majority of its employees. Accordingly, we will closely scrutinize the
agreement’s terms for unfairness.
C. The Confidentiality Agreement
In Fuentes, the plaintiff signed an employment agreement containing
“a provision mandating arbitration of ‘all disputes which may arise out of the
employment context’ ” and later signed two virtually identical confidentiality
agreements prohibiting her from using or disclosing confidential information
and trade secrets. (Fuentes, supra, 19 Cal.5th at p. 100; see id. at p. 101.)
The plaintiff contended that the arbitration agreement was substantively
unconscionable because, when read along with the confidentiality
agreements, it was unfairly one-sided to the extent it required her to
arbitrate all claims she may have against her employer while permitting the
employer to litigate in court the claims it was most likely to bring against
her. (Id. at pp. 107–108.)
This issue turned on whether the parties intended for claims brought
under the confidentiality agreements to be exempt from the arbitration
mandate. (Fuentes, supra, 19 Cal.5th at p. 108.) To discern the parties’
intent, the Supreme Court first considered the text of the confidentiality
agreements and discovered they were silent about the appropriate forum to
resolve such claims. (Ibid.) They made no reference to arbitration. (Id. at
pp. 108–109.) Since, “absent an agreement to arbitrate, the default rule is
that parties may litigate breach of contract claims in court,” the court was
inclined to construe this silence as an indication that the parties intended to
allow the employer to bring its claims in court. (Id. at p. 109, italics omitted.)
9
Reading the confidentiality agreements together with the arbitration
agreement, however, rendered the parties’ intent ambiguous. (Fuentes,
supra, 19 Cal.5th at p. 109.) The confidentiality agreements stated that they
superseded all prior agreements related to unfair competition, trade secrets,
and confidentiality, which included the earlier-signed arbitration agreement
to the extent it applied to confidentiality-type claims. (Ibid.) At the same
time, “the arbitration agreement limit[ed] the parties’ authority to supersede
it by requiring that any future modification of its terms be ‘in writing and
signed by the President of the Company.’ ” (Id. at p. 110.) Because the
record was unclear as to whether the president signed the confidentiality
agreements, the Supreme Court ultimately remanded the case to the trial
court for further factfinding and litigation on that point. (Id. at pp. 111–112.)
In deciding to read the agreements together, the Fuentes court cited
Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482 (Alberto). (Fuentes,
supra, 19 Cal.5th at p. 109.) In Alberto, the plaintiff signed several
agreements on her date of hire, including an arbitration agreement and a
confidentiality agreement. (Alberto, at p. 486.) Applying Civil Code3 section
1642—which provides that agreements “relating to the same matters,
between the same parties, and made as parts of substantially one
transaction, are to be taken together”—the Alberto court readily concluded
that the agreements should be construed as a package. (Alberto, at p. 490.)
As it reasoned, the agreements were signed on the same day, they were
components of a single transaction—plaintiff’s hiring—and they governed the
same issue—how to resolve disputes between the plaintiff and her employer
arising from her employment. (Id. at pp. 490–491.) The confidentiality
3 Further undesignated statutory references are to the Civil Code.
10
agreement was thus relevant in deciding whether the arbitration agreement
was unconscionable. (Id. at p. 491.)
Attempting to apply Alberto and, implicitly, section 1642, the trial court
here acknowledged that the Arbitration and Confidentiality Agreements
involved the same parties and were signed on the same date as part of
Cluck’s hiring process. It found the agreements did not govern the same
issue, however, because “[n]othing in the [Confidentiality Agreement]
indicates it pertains to resolving disputes arising out of Cluck’s employment
with” GEO.
We think the trial court read Alberto more narrowly than is warranted.
Indeed, we fail to see how this case is meaningfully distinguishable from
Alberto.4 There, the arbitration agreement stated that “ ‘[a]ny and all claims
or controversies arising out of’ ” the plaintiff’s employment “ ‘shall be resolved
through final and binding arbitration.’ ” (Alberto, supra, 91 Cal.App.5th at
p. 486.) The confidentiality agreement, on the other hand, prohibited her
from disclosing “ ‘trade secrets,’ ”—defined “broadly to include ‘information of
a confidential, proprietary or secret nature’ ”—and required her to consent
to any injunction “from any court of competent jurisdiction, enjoining and
restraining” her from “ ‘violating or threatening to violate’ ” the agreement.
(Id. at p. 487). The Alberto court determined that the agreements “governed,
4 While “the existence or nonexistence” of the circumstances set forth in
section 1642 “is generally a factual question” reviewed for substantial
evidence (Silva v. Cross Country Healthcare, Inc. (2025) 111 Cal.App.5th
1311, 1322 (Silva), the trial court and the parties have relied on the text of
the agreements in determining whether they concern the same issue. Where,
as here, the interpretation of a contract “does not turn on the credibility of
extrinsic evidence,” our review is de novo. (Morgan v. City of Los Angeles Bd.
of Pension Comrs. (2000) 85 Cal.App.4th 836, 843.)
11
ultimately, the same issue—how to resolve disputes arising between
[plaintiff] and [defendant] arising from [plaintiff’s] employment.” (Id. at
pp. 490–491.) Reading the agreements separately, the court added, “fails to
account for the overall dispute resolution process the parties agreed upon.”
(Id. at p. 491.)
In this case, the Arbitration Agreement similarly “applie[d] to any
dispute arising out of or related to [Cluck’s] employment with” GEO and
required “any legal dispute or controversy covered by” the agreement to
“be resolved by final and binding arbitration.” In the Confidentiality
Agreement, by contrast, Cluck agreed “not to engage in any unauthorized
use or disclosure of” Confidential Information, not to use company property to
compete with GEO, not to solicit GEO employees to work for a competitor,
and to assign any relevant intellectual property developed during his
employment to GEO. As GEO acknowledges, the Confidentiality Agreement
also includes three provisions addressing dispute resolution, none of which
involve arbitration:
“8. Special Remedies. The parties agree that a breach
of this Agreement by me will cause irreparable harm
to Company in addition to any damages that can be
quantified. Accordingly, in the event of such a breach
or a threatened breach, the Company will be entitled
to remedies of specific performance, injunctive relief
(temporary, preliminary, and permanent), and any other
legal or equitable relief allowed by law… .”
“12. Choice of Law and Venue. … [T]he law of
Florida shall govern the interpretation, application and
enforcement of this Agreement… . Any legal proceeding
arising from or related to this Agreement shall be litigated
in a court of competent jurisdiction (state or federal) located
in Florida … .”
12
“15. Jury Waiver. The parties agree to resolve any
dispute arising from or related to this Agreement in a court
of law, sitting without a jury. …”
Upon comparing these agreements, it is true, as the trial court
observed, that the Arbitration Agreement expressly covers any dispute
arising out of Cluck’s employment with GEO whereas the Confidentiality
Agreement more specifically outlines his obligations with respect to private
information he may learn by virtue of his employment, intellectual property
made during his employment, and competitors of the company. To conclude
the agreements therefore do not govern the same issue, however, is to
define the issue too narrowly, because an employee’s alleged disclosure of
confidential information can most assuredly create a dispute that arises
out of the employment. (See Holguin v. Dish Network LLC (2014) 229
Cal.App.4th 1310, 1321 [“The fact that each of the written instruments had
slightly different (though overlapping) areas of concern does not mean that
they are not interrelated”].) Indeed, Cluck’s duties as set forth in the
Confidentiality Agreement would not exist but for his employment with GEO.
And in the event of a breach or threatened breach of such duties, the
agreement prescribes a court trial in Florida. Accordingly, as in Alberto,
we read both agreements as pertaining to the resolution of disputes arising
from Cluck’s employment. (See Alberto, supra, 91 Cal.App.5th at pp. 490–
491.)
We find further support for our conclusion in Silva, supra, 111
Cal.App.5th 1311. In that case, the plaintiff signed an arbitration agreement
in which she and her employer agreed “ ‘that binding arbitration shall be the
exclusive means of resolving all claims between them, whether or not arising
out of or in any way related to’ ” her employment. (Id. at p. 1317.) She also
13
signed an employment agreement that set forth various terms and conditions
of her employment, including terms prohibiting her from using or disclosing
confidential information and trade secrets. (Id. at p. 1318.) The employment
agreement specified that “ ‘[a]ll suits, proceedings and other actions relating
to, arising out of or in connection with” that agreement will be litigated in
federal or state court in Los Angeles. (Id. at p. 1319.) The Silva court
rejected the employer’s argument that these agreements did not relate to the
same matter because “the former ‘sets forth a dispute resolution mechanism’
while the latter ‘covers a wide range of subjects’ ” relating to the plaintiff’s
employment. (Id. at p. 1325.) The court determined the agreements covered
“ ‘the general subject matter’ of the mechanism to be used in resolving
disputes between” the employer and its employees, where the arbitration
agreement prescribes arbitration as the default and the employment
agreement, “while broadly defining an employee’s duties and responsibilities,
goes on to define an exception to arbitration as the default dispute resolution
mechanism for an employee’s breaches of those duties.” (Ibid.) Here, too, the
Arbitration Agreement sets arbitration as the default forum to resolve claims
arising from or related to Cluck’s employment, and the Confidentiality
Agreement creates an exception for GEO’s confidentiality- or competition-
type claims.
GEO suggests that we should not construe the agreements together
under section 1642 because each contains an integration clause. Indeed,
the Arbitration Agreement provides that it “replaces all prior agreements
regarding the arbitration of disputes and is the full and complete agreement
relating to the formal resolution of disputes covered by this Agreement.”
And the Confidentiality Agreement states:
14
“Except as otherwise provided herein, the terms contained
in this document are the entire agreement between the
parties concerning the matters covered in it. The parties
are not relying upon any representations, understandings
or agreements outside of this Agreement in making the
decision to enter into it. This Agreement supersedes prior
agreements between me and the Company regarding the
subject matter addressed in this Agreement … . And, this
Agreement supplements and does not replace or modify
confidentiality, invention assignment, and restrictive
covenant provisions that may be contained in … other
agreements between the parties.”
The mere existence of an integration clause, however, does not
necessarily preclude us from considering whether two agreements should be
construed together under section 1642. (R.W.L. Enterprises v. Oldcastle, Inc.
(2017) 17 Cal.App.5th 1019, 1031.) The integration clauses in this case do
not clearly indicate the agreements should be read independently. Neither
the Arbitration Agreement nor the Confidentiality Agreement specifically
references the other. (Cf. Subaru of America, Inc. v. Putnam Automotive, Inc.
(2021) 60 Cal.App.5th 829, 840–841 [applying § 1642 not warranted where
one agreement expressly states it does not modify a second agreement and
“ ‘is a separate, negotiated contract apart from’ ” the second (italics
omitted)].) And where two agreements are signed at the same time, both
covering dispute resolution and both containing an integration clause, it is
not clear which is controlling.
GEO also appears to argue that the agreements cannot govern the
same issue or comprise a single transaction because the Confidentiality
Agreement was a condition of Cluck’s employment whereas the Arbitration
Agreement was optional, affording Cluck 30 days to decide whether to opt
out. But the idea that a theoretical employee could have opted out of the
15
Arbitration Agreement is irrelevant. Here, it is undisputed that Cluck signed
both agreements at the same time during his hiring and did not opt out.
With both agreements so signed, we may properly ask whether the parties
intended them to be construed together. We have answered that question in
the affirmative and therefore consider the Confidentiality Agreement in
assessing unconscionability.
D. Substantive Unconscionability
“An arbitration agreement need not ‘mandate the arbitration of all
claims between’ the parties.” (Ramirez, supra, 16 Cal.5th at p. 495.)
“However, if an agreement singles out certain claims for arbitration, there
must be ‘mutuality.’ ” (Ibid.) “ ‘Given the disadvantages that may exist for
plaintiffs arbitrating disputes, it is unfairly one-sided for an employer with
superior bargaining power to impose arbitration on the employee as plaintiff
but not to accept such limitations when it seeks to prosecute a claim against
the employee, without at least some reasonable justification for such one-
sidedness based on ‘business realities’… .” (Ibid.) “In the absence of
justification, we assume the agreement is unconscionable.” (Id. at p. 496.)
GEO contends there is no lack of mutuality here. As it reasons, the
Confidentiality Agreement would control—thus allowing it to pursue its
claims in court—only if Cluck opted out of the Arbitration Agreement. But
since he opted in, GEO maintains, the Arbitration Agreement controls and it
would be equally obligated to arbitrate confidentiality disputes.
We are not persuaded. Construing the Arbitration and Confidentiality
Agreements together means we endeavor “ ‘to give effect to every clause and
harmonize the various parts’ ” of both agreements. (Santana v. Studebaker
Health Care Center, LLC (2026) 120 Cal.App.5th 1, 23.) And were we to
16
agree with GEO’s construction, it would render meaningless multiple terms
in the Confidentiality Agreement requiring the parties to resolve disputes
arising thereunder in court.
In reading the agreements together, we understand them to generally
require arbitration of disputes arising from or related to Cluck’s employment,
with the exception of disputes arising from or related to the specific duties set
forth in the Confidentiality Agreement, which are to be resolved in court.
Indeed, the Arbitration Agreement very broadly applies to “any dispute
arising out of or related to” (a) Cluck’s employment with the “Company”—
defined to “refer jointly and separately to” 16 distinct companies, including
defendant The GEO Group, Inc.5; (b) his “relationship with any of its or their
agents, employees, affiliates, successors, subsidiaries, assigns or parent
companies”6; and (c) the termination of employment. The agreement then
further broadens its scope in the following paragraph, which provides that it
“also applies, without limitation, to disputes with any entity or individual
arising out of or related to” several topics, including the employment
relationship, trade secrets, unfair competition, compensation, overtime,
rest periods, discrimination, and harassment.
5 The other companies are: BI Incorporated, BI Mobile Breath Inc.,
CCGI LLC, Cornell Abraxas Group OS, LLC, Cornell Abraxas Group, Inc.,
Cornell Companies of CA OS LLC, Cornell Companies of TX OS LLC,
Cornell Interventions OS, LLC, GEO Care, LLC, GEO Corrections &
Detention LLC, GEO Corrections Holdings, Inc., GEO Re-Entry Services
LLC, GEO Transport, Inc., Protocol Criminal Justice, Inc., and Community
Education Centers, Inc.
6 As noted above, defendant GEO Secure Services, LLC is a wholly
owned subsidiary of defendant The GEO Group, Inc.
17
By contrast, the Confidentiality Agreement more narrowly applies to
disputes between Cluck and The GEO Group, Inc. and “any entity (parent,
subsidiary, or otherwise) that is under common ownership or control with
The GEO Group, Inc. or its successors or assigns” that Cluck is “employed
with, entrusted with Confidential Information about, or otherwise [has]
material involvement with.” In this agreement, as discussed, Cluck makes
several promises centered around maintaining GEO’s competitive edge,
including that he would not “engage in any unauthorized use of disclosure of”
Confidential Information, compete with GEO, or solicit its employees to work
for a competitor.
In other words, we can harmonize the agreements because the scope
of the entities, individuals, and claims covered by the Arbitration Agreement
is clearly wider than that of the Confidentiality Agreement. (See § 1652
[“Repugnancy in a contract must be reconciled, if possible, by such an
interpretation as will give some effect to the repugnant clauses, subordinate
to the general intent and purpose of the whole contract”].) The Arbitration
Agreement covers the claims Cluck would most likely bring against GEO,
including those based on compensation, overtime, and rest periods. The
narrower Confidentiality Agreement ostensibly requires both parties to bring
claims arising from or related to that agreement in court, but any breach of
the obligations set forth therein would generally give rise to claims by GEO
against Cluck. (See Ramirez, supra, 16 Cal.5th at p. 498 [“claims related to
intellectual property rights and severance or noncompete agreements, claims
for equitable relief related to unfair competition or the disclosure of trade
secrets or confidential information … are more likely to be employer-
initiated”].) In directing the claims Cluck is most likely to bring to
18
arbitration, while permitting GEO to pursue its most likely claims in court,
the overall agreement is unfairly one-sided. (See id. at pp. 497–498.)
GEO has not attempted to offer any purported justification for this
differential treatment in its supplemental brief, so we must assume the lack
of mutuality is substantively unconscionable. (Ramirez, supra, 16 Cal.5th at
p. 500.) Even if GEO had done so, we would likely find the degree of
unfairness exceeds any legitimate business need. (Cf. Silva, supra, 111
Cal.App.5th at p. 1329 [“even if we indulge [employer’s] ostensible need to
access the judicial forum to seek injunctive relief, that need does not justify
contractually requiring the employee to consent to the entry of an injunction,
without a bond, once in that forum”].) The Confidentiality Agreement not
only allows GEO to seek relief in court, but it mandates that any litigation
take place in Florida—where GEO is incorporated but far from where Cluck
lives and works—and without a jury. It further requires Cluck to concede
“that a breach of this Agreement by [him] will cause irreparable harm to
Company in addition to any damages that can be quantified. Accordingly, in
the event of such a breach or threatened breach, the Company will be entitled
to remedies of specific performance, injunctive relief (temporary, preliminary,
and permanent), and any other legal or equitable relief allowed by law.”
(Italics added.)
These provisions solely benefitting GEO exacerbate the substantive
unfairness of the agreement to arbitrate. (See Magno v. The College Network,
Inc. (2016) 1 Cal.App.5th 277, 288–289 [a forum selection provision may
render an arbitration agreement unconscionable where it contravenes the
nondrafting party’s reasonable expectations]; Stoker v. Blue Origin, LLC
(2026) 120 Cal.App.5th 91, 111 [“provision of the arbitration agreement
purporting to waive the right to a jury in any action tried in court is
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substantively unconscionable”]; Silva, supra, 111 Cal.App.5th at p. 1329
[term entitling employer but not employee to temporary, preliminary and
permanent injunctive relief is substantively unconscionable]; Alberto, supra,
91 Cal.App.5th at p. 492 [provision waiving the employer’s need to show
irreparable harm is unconscionable and exceeds “the legitimate ‘margin of
safety’ for the employer”].) In other words, Cluck must submit his claims
to arbitration, while GEO may pursue its claims before a judicial forum, in a
convenient location, with shortcuts to relief. The imbalance of concessions
that Cluck must make compared to GEO is unjustified and unconscionable.
E. Severance
“If a contractual clause is found unconscionable, the court may, in its
discretion, choose to do one of the following: (1) refuse to enforce the contract;
(2) sever any unconscionable clause; or (3) limit the application of any clause
to avoid unconscionable results.” (Ramirez, supra, 16 Cal.5th at p. 513; see
§ 1670.5.) Assuming a contract has a legal purpose, a court must first ask
“whether the contract’s unconscionability can be cured purely through
severance or restriction of its terms, or whether reformation by augmentation
is necessary.” (Ramirez, at p. 516.) Where “the offending provision can be
severed or limited, and ‘the rest of the arbitration agreement left intact,’ then
severance or restriction is the preferred course for provisions that are
collateral to the agreement’s main purpose.” (Ibid.) If the unconscionability
can only be cured through augmentation, the court should not enforce the
contract because “[c]ourts cannot ‘rewrite agreements and impose terms to
which neither party has agreed.’ ” (Ibid.) If a contract contains a severance
clause, the court should take it into account, but it does not divest the court
of its discretion under section 1670.5. (See Ramirez, at p. 517.)
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“Even if a contract can be cured, the court should also ask whether the
unconscionability should be cured through severance or restriction because
the interests of justice would be furthered by such actions.” (Ramirez, supra,
16 Cal.5th at p. 516.) In this analysis, the court may consider whether
severance would incentivize the “employer to draft a one-sided arbitration
agreement in the hope employees would not challenge the unlawful
provisions, but if they do, the court would simply modify the agreement to
include the bilateral terms the employer should have included in the first
place.” (Id. at p. 517.) A court should not enforce an agreement where it
appears the employer “engaged in a systematic effort to impose arbitration
on the [employee] not simply as an alternative to litigation, but to secure a
forum that works to the [employer’s] advantage.” (Id. at pp. 516–517.)
GEO asks that we remand for the trial court to consider whether any
offending terms can be severed, but remand is not necessary in this case.
Upon concluding the Arbitration Agreement was unconscionable standing
alone, the trial court impliedly found severance was unwarranted. (See
Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [“ ‘All intendments and
presumptions are indulged to support [the judgment] on matters as to which
the record is silent, and error must be affirmatively shown’ ”].) We have now
determined that the Arbitration Agreement, taken together with the
Confidentiality Agreement, is unconscionable based on its lack of mutuality.
There would be no rational basis for the trial court to reverse course and
sever the terms it initially found offensive, as well as the terms we have
deemed offensive on appeal, if we were to remand.
In any event, severance is not the appropriate course of action here.
The central purpose of the agreements taken together is to lay out how
disputes between GEO and its employees will be resolved. In a sleight
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of hand, GEO has each employee sign the Arbitration Agreement—which
gives the impression that both the employee and GEO will submit to the
alternative forum—and makes it unnecessarily difficult and time-consuming
for the employee to opt out. It then separately requires the employee to sign
the Confidentiality Agreement—which allows GEO to bring its most likely
claims in its favored forum and “puts a thumb on [GEO’s] side of the scale in
obtaining any and all injunctive relief in that judicial forum.” (Silva, supra,
111 Cal.App.5th at p. 1331.) This unfairness strikes at the heart of the
overall agreement between the parties. We cannot endorse GEO’s attempt
to obscure this one-sidedness behind the cumbersome opt-out provision and
the separate Confidentiality Agreement. Accordingly, even assuming the
unconscionable provisions could be severed from the agreements, severance
would not be in the interest of justice here.
DISPOSITION
The order denying the motion to compel arbitration is affirmed.
Respondent is entitled to costs on appeal.
DATO, J.
WE CONCUR:
McCONNELL, P. J.
KELETY, J.
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