Frank v. Tesla, Inc.

── Frank v. Tesla, Inc. ── Court: Court of Appeals for the Ninth Circuit Date: May 01, 2026 Category: General NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 1 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT NAYMON FRANK, an individual, No. 25-4168 D.C. No. Plaintiff - Appellant, 2:22-cv-01590-MEMF-AGR v. MEMORANDUM* TESLA, INC., a corporation; SUZIE HATZIS, an individual, Defendants - Appellees. Appeal from the United States District Court for the Central District of California Maame Ewusi-Mensah Frimpong, District Judge, Presiding Argued and Submitted April 21, 2026 Pasadena, California Before: NGUYEN and BRESS, Circuit Judges, and TUNHEIM, District Judge.** Naymon Frank (“Frank”) appeals the district court’s grant of Tesla, Inc.’s (“Tesla”) motion to compel arbitration, and the district court’s denial of Frank’s * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable John R. Tunheim, United States District Judge for the District of Minnesota, sitting by designation. motion to vacate the subsequent arbitration award. We have jurisdiction under 28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(3). We review decisions to compel arbitration de novo. Sanford v. Memberworks, Inc., 483 F.3d 956, 960 (9th Cir. 2007). We review a district court’s legal conclusions in confirming an arbitration award de novo, albeit “cognizant that arbitration is an encouraged method of dispute resolution and that our review of the [arbitrator’s] decision is greatly limited.” U.S. Life Ins. Co. v. Superior Nat’l Ins. Co., 591 F.3d 1167, 1172 (9th Cir. 2010). For the following reasons, we affirm both decisions of the district court. When Tesla hired Frank in 2016, he signed an employment contract containing an agreement to arbitrate (the “Agreement”). Frank resigned from Tesla in 2020. In January 2022, Frank brought fourteen claims against Tesla and his former supervisor, Suzie Hatzis, in state court. Among Frank’s claims were discrimination, harassment, fraud, intentional infliction of emotional distress, constructive discharge, and violations of California labor laws. The district court compelled arbitration over Frank’s objection and, following arbitration, denied Frank’s motion to vacate the arbitrator’s final award. Frank appeals both district court decisions. We turn first to the grant of Tesla’s motion to compel arbitration. Agreements to arbitrate are unenforceable where “such grounds . . . exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Frank argues that 2 25-4168 under California law, which binds us here, the Agreement was unconscionable, and that the district court thus erred in compelling arbitration under the Agreement. We conclude that the district court properly compelled arbitration. In California, a contract is unconscionable only if both procedural and substantive unconscionability are present. Sanchez v. Valencia Holding Co., LLC, 353 P.3d 741, 748 (Cal. 2015). California courts assess unconscionability on a “sliding scale,” under which a greater degree of procedural unconscionability is tolerated in proportion with a lesser degree of substantive unfairness. See Baltazar v. Forever 21, Inc., 367 P.3d 6, 11 (Cal. 2016). The unequal bargaining power between Tesla and Frank gives rise to a certain degree of procedural unconscionability. But we are