In Stoker v. Blue Origin, LLC, B344945 (Cal. Ct. App. Apr. 24, 2026), a former senior director at the space exploration company beat Blue Origin’s motion to compel arbitration—not because the federal Ending Forced Arbitration Act protected him, but because his employment agreement was so one-sided that California courts refused to enforce it at all. The Second District Court of Appeal held the arbitration agreement was both procedurally and substantively unconscionable, and it declined to sever away the bad parts.

Craig Stoker was hired by Blue Origin in August 2020 as a senior director of program management. As a condition of employment, he signed an agreement that required arbitration of most disputes between him and Blue Origin—including wage and hour claims, discrimination, harassment, retaliation, whistleblower claims, and other employment-related matters. The agreement also excluded certain claims from arbitration, including workers’ compensation, unemployment benefits, and sexual harassment claims (the latter unless the employee voluntarily chose arbitration).

Stoker was terminated in October 2022 after raising concerns about Blue Origin’s safety practices. In November 2023, he sued, asserting claims for retaliation, sexual and gender discrimination and harassment, failure to prevent discrimination, wrongful termination, and more. Blue Origin moved to compel arbitration. The trial court denied the motion, finding the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act applied. Blue Origin appealed.

The Court of Appeal affirmed—but on different grounds. It never reached the federal statute question. Instead, it concluded the arbitration agreement was unenforceable under California unconscionability law.

Procedural unconscionability looks at how the agreement was formed. Stoker declared that Blue Origin’s recruiter told him the agreement contained “standard terms,” that “everyone has to sign” and “everybody always signs,” and that it was a condition of employment. He said he had questions about the documents, but the recruiter did not offer to answer them.

Blue Origin offered no evidence that Stoker could negotiate any of the terms. On that record, the Court of Appeal concluded the agreement was a contract of adhesion—presented on a take-it-or-leave-it basis with no real opportunity for negotiation. While adhesion contracts alone often generate only a low degree of procedural unconscionability, the court made clear that when an agreement is mandatory and nonnegotiable, any one-sided terms will face sharper scrutiny.

The court identified four independent substantive problems with the agreement.

First, the agreement was too broad. It required arbitration of “any and all claims, disputes, or controversies” between Stoker and Blue Origin—and “Blue Origin” was defined to include its parent, subsidiaries, affiliates, successors, assigns, and their current and former officers, directors, employees, and agents. The court rejected Blue Origin’s argument that the agreement was implicitly limited to employment disputes, stating simply that “all means all.” The court gave pointed examples: as written, the agreement could potentially apply if Stoker were injured in a car accident with another Blue Origin employee, or if his house were damaged by debris from a Blue Origin rocket. The court compared it to Cook v. University of Southern California, where a similar overbroad provision was held unconscionable.

Second, the agreement lacked mutuality. Employee-side claims—wage and hour, discrimination, harassment, retaliation, whistleblower—were funneled into arbitration. But the carveouts from arbitration included trade secret violations, trademark infringement, breach of fiduciary duty, breach of proprietary information or confidentiality obligations, and breach of non-solicitation agreements. The court concluded those were claims most likely to be brought by Blue Origin, not Stoker. California law does not require perfect symmetry, but an employer cannot channel employee claims into arbitration while reserving court for the claims the employer is most likely to file.

Third, the agreement contained a predispute jury trial waiver for claims that fell outside arbitration. California law generally prohibits predispute contractual jury waivers. The court cited Grafton Partners v. Superior Court and its progeny for the rule that such waivers are contrary to California public policy.

Fourth, the agreement waived representative actions, including PAGA claims. Even though Stoker had not brought a PAGA claim, the court evaluated the waiver because unconscionability is judged at the time the agreement is made. A categorical predispute waiver of the right to bring a representative PAGA action is unenforceable under California law, and the court cited Adolph v. Uber Technologies, Fuentes v. Empire Nissan, and Hasty v. American Automobile Association for that point.

Blue Origin’s agreement had a severance clause, and in many cases employers argue that unlawful provisions should simply be cut out, leaving the rest of the arbitration agreement intact. Not here. The court found the core arbitration provision itself was infected by overbreadth and lack of mutuality—fixing those problems would require rewriting the agreement, which California courts are not permitted to do. The court also found at least four unconscionable elements, which together showed a systematic effort to impose a forum advantageous to the stronger party. Severing them would only incentivize employers to draft one-sided agreements and rely on courts to clean them up later.

Stoker reinforces that California courts will look at arbitration agreements as a whole. An employer cannot draft a broad, one-sided agreement and then ask a court to surgically remove the unlawful pieces. The decision is a reminder that arbitration agreements in California employment contexts must be genuinely balanced—tied to employment-related claims, mutually applicable, and respectful of rights employees cannot waive before a dispute arises.