GEO Secure Services, LLC, a wholly owned subsidiary of The GEO Group, Inc. (collectively, GEO), is a private contractor providing housing and transportation services for federal detainees. GEO hired Jeffrey Cluck to work at its El Centro detention facility in July 2022. As part of its standard onboarding process, GEO had Cluck electronically sign two documents the same day: a two-page Arbitration Agreement requiring binding arbitration of disputes arising from his employment, with a 30-day opt-out window requiring a mailed or faxed letter to GEO’s legal department; and a separate Confidentiality Agreement in which Cluck promised not to disclose GEO’s confidential information, not to compete using company resources, and not to solicit GEO employees for a competitor. The Confidentiality Agreement further provided that any breach would cause GEO “irreparable harm” entitling it to special remedies, and that any dispute arising from that agreement would be litigated, without a jury, in a Florida court.

In December 2023, Cluck and a co-plaintiff filed a putative class action alleging wage and hour violations. GEO moved to compel arbitration of Cluck’s claims under the Arbitration Agreement. Cluck opposed, arguing the Arbitration and Confidentiality Agreements, read together, were unconscionable.

The San Bernardino County Superior Court denied GEO’s motion to compel arbitration. It declined to read the two agreements together, reasoning the Confidentiality Agreement did not itself address resolution of employment disputes. Even considered alone, however, the court found the Arbitration Agreement procedurally unconscionable because it referenced American Arbitration Association discovery rules GEO never provided to Cluck, and substantively unconscionable on two grounds: it bound Cluck to arbitrate against a broad list of GEO-affiliated entities without binding those entities to arbitrate against him, and it failed to carve out sexual harassment and sexual assault claims as required by the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 U.S.C. §§401–402). GEO timely appealed.

In the partially published case of Cluck v. GEO Secure Services, LLC, No. D087341 (Cal. Ct. App., 4th Dist., Div. 1, August 2026) — the Court of Appeal affirmed the trial court’s order denying GEO’s motion to compel arbitration, though on different grounds than the trial court relied upon. This opinion is certified for publication with the exception of Part E of the Discussion (addressing severance), which remains nonpublished under California Rules of Court, rule 8.1110. The published portions are fully citable.

Writing for a unanimous panel, Justice Dato explained that while the appeal was pending, the California Supreme Court decided Fuentes v. Empire Nissan, Inc. (2026) 19 Cal.5th 93, which addressed how an arbitration agreement and a separately signed confidentiality agreement interact in an unconscionability analysis; the court requested and received supplemental briefing on Fuentes’s effect. Under the general framework confirmed in Fuentes and Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, a contract is unconscionable where one party lacked meaningful choice and the resulting terms are unreasonably one-sided, with procedural and substantive unconscionability assessed on a sliding scale.

On procedural unconscionability, the panel held the Arbitration Agreement was a contract of adhesion, and that its opt-out provision did not meaningfully cure that oppression. Although an opt-out clause ordinarily undercuts a finding of procedural unconscionability, citing Gentry v. Superior Court (2007) 42 Cal.4th 443, the court found this particular opt-out process too cumbersome to count: the form provided only a single “AGREED AND RECEIVED” signature line with no box to decline, and an employee wishing to opt out had to draft a separate signed statement and mail or fax it to Florida within 30 days of a new job — a real but practically unrealistic path that steered nearly every new hire into arbitration by default.

Turning to substance, the panel parted ways with the trial court’s refusal to read the Arbitration and Confidentiality Agreements together. Applying Civil Code section 1642, which requires agreements relating to the same matter, between the same parties, and made as part of substantially one transaction to be construed together, and following Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482 and Silva v. Cross Country Healthcare, Inc. (2025) 111 Cal.App.5th 1311, the court held both agreements governed the same general subject — how disputes between Cluck and GEO arising from his employment would be resolved — even though the Confidentiality Agreement addressed a narrower slice of that subject than the Arbitration Agreement’s broad sweep. The panel rejected GEO’s argument that each agreement’s integration clause required reading them independently, since neither clause referenced the other, and rejected GEO’s argument that the Confidentiality Agreement’s mandatory character (as opposed to the Arbitration Agreement’s technical opt-out right) took it outside section 1642’s reach, since Cluck in fact signed both agreements as part of a single hiring transaction and never opted out of either.

Reading the two agreements together, the panel found they carved out an unfair asymmetry: the broadly worded Arbitration Agreement swept in the wage, overtime, and rest-period claims Cluck himself was most likely to bring, while the narrower Confidentiality Agreement’s separate forum-selection, jury-waiver, and irreparable-harm provisions preserved a Florida court — not arbitration — for the competition and confidentiality claims GEO itself was most likely to bring against an employee. Because GEO offered no business justification for that one-sidedness, the panel had to presume it was substantively unconscionable, and found the imbalance particularly stark given that Cluck’s claims would proceed in arbitration under a cumbersome opt-out default, while GEO’s own claims would proceed in a distant judicial forum, without a jury, with Cluck pre-conceding irreparable harm from any breach. Given this significant degree of both procedural and substantive unconscionability, the panel held the arbitration agreement, considered together with the Confidentiality Agreement, was unenforceable, and it declined to reach the trial court’s separate rulings on the discovery provision, the mutuality of claims against GEO’s affiliated entities, or the sexual harassment carve-out. The panel affirmed the order denying arbitration and awarded Cluck his costs on appeal.