The judge below called it a 'radical power imbalance' - the appeals court saw it differently
An Arizona appeals court ruled that paying workers more than other jobs does not make the arbitration waivers they sign unfair.
In a decision filed on August 18, 2026, the Arizona Court of Appeals reversed a lower court and sent two injured workers into arbitration, finding the clauses they signed were enforceable even though no one had explained what arbitration meant.
Both workers were inmates at the Arizona Department of Corrections, Rehabilitation & Reentry who took jobs at Hickman's Egg Ranch (Hickman) through a prison labor program. Both were hurt on the job. One slipped and fell while cleaning cages on her second day. The other had his right thumb crushed by a machine. Each sued Hickman for negligence rather than go to arbitration.
Both had signed a one-page "Volunteer Agreement and Waiver" during orientation. The document set out its arbitration clause in bold, underlined text and warned, in capital letters directly above the signature line, that signing meant giving up the right to sue. A Hickman representative never explained how arbitration worked.
A Maricopa County judge sided with the workers and refused to send the cases to arbitration. The judge found a "radical power imbalance" because Hickman paid $4.85 an hour against roughly $.10 an hour for other prison jobs. That gap, the judge said, left inmates so "highly incentivized" to sign that Hickman could "essentially write anything that they want into" the contract.
The appeals court reached the opposite conclusion. "To penalize Hickman because it paid inmates the highest wage turns procedural unconscionability on its head," it wrote. Rewarding that argument, the court added, would give employers "every reason to pay inmates less."
The court said the clause was not buried. It sat on a separate page, in conspicuous type. Both signers had time to read it and were free to ask questions. Neither did. Arizona law, the court noted, assumes a person "read and understood the terms" of a contract they sign.
The court also held that employers do not have to explain standardized clauses, that take-it-or-leave-it contracts are routinely enforced, and that unequal bargaining power alone does not void an arbitration agreement.
One worker argued that Hickman had withheld information about its "history of workplace injuries and unsafe working conditions." The court rejected that, holding Arizona law did not require the employer to volunteer everything a signer might find helpful.
The negligence claims have not been decided. Both cases now head to arbitration.
