Yes, you can sometimes sue even if you signed an arbitration agreement. Signing one does not automatically close the courthouse door. Under the Federal Arbitration Act, these agreements are treated as enforceable contracts, which means they can also be challenged on the same grounds as any other contract.1Office of the Law Revision Counsel. 9 USC 2 – Validity, Irrevocability, and Enforcement of Agreements to Arbitrate Certain federal statutes also override arbitration clauses entirely for specific kinds of claims, and the other party can lose the right to arbitrate by acting inconsistently with it. Whether you get into court depends on the wording of your agreement, how the other side has behaved, and what kind of dispute you have.
When the Agreement Itself Can Be Attacked
The FAA says arbitration agreements are enforceable except when they can be revoked “upon such grounds as exist at law or in equity for the revocation of any contract.”1Office of the Law Revision Counsel. 9 USC 2 – Validity, Irrevocability, and Enforcement of Agreements to Arbitrate In practice, that means you can attack an arbitration clause using the same arguments that would void any contract. The most common is unconscionability.
Unconscionability
An unconscionable contract is one so fundamentally unfair that no reasonable person with full information and a real choice would agree to it. Courts look at two dimensions.
Procedural unconscionability asks how the agreement was formed. A take-it-or-leave-it employment contract you had no ability to negotiate is a classic example of a power imbalance. Surprise is the other piece: the arbitration clause buried in dense fine print, tucked into an unrelated section, or presented in a language the signer doesn’t read. Courts are more likely to find procedural unconscionability when several of these overlap, such as an employee with limited English handed a 40-page contract and told to sign on the spot.
Substantive unconscionability targets the terms themselves. Red flags include provisions that cap your damages well below what a court could award, require you to split arbitrator fees that can run into the thousands, or dramatically shorten the time you have to file a claim. A particularly strong indicator is a one-way clause where the company keeps its right to sue you in court while forcing you to arbitrate everything. Non-mutual terms like that are strong evidence of unconscionability.
Most courts require some showing of both procedural and substantive unfairness, applied on a sliding scale. A clause with extremely one-sided terms may fall even if the procedural unfairness was modest, and vice versa.
Fraud and Duress
Standard contract defenses apply too. Fraud means someone actively lied about what the arbitration clause does, such as telling you a document was just a policy acknowledgment when it actually contained an arbitration agreement. Duress means you signed under threat or coercion. Important wrinkle: these defenses must target the arbitration clause itself, not the broader contract it sits in. If you argue the whole contract was fraudulent, that challenge itself may be sent to the arbitrator to decide.
Federal Laws That Override Arbitration Clauses
Congress has carved out specific categories of claims where arbitration agreements simply don’t apply, regardless of what you signed.
Sexual Assault and Sexual Harassment Claims
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act voids any pre-dispute arbitration agreement for claims involving sexual assault or sexual harassment. The person bringing the claim chooses: they can elect to go to court, and the arbitration clause becomes unenforceable for that dispute.2Office of the Law Revision Counsel. 9 USC 402 – No Validity or Enforceability The law covers claims that arose on or after March 3, 2022, and applies under federal, state, and tribal law.
This statute also overrides delegation clauses, which are covered below. Even if your arbitration agreement says an arbitrator decides all enforceability questions, a court determines whether this law applies to your dispute.2Office of the Law Revision Counsel. 9 USC 402 – No Validity or Enforceability The same law voids pre-dispute joint-action waivers for these claims, so class action waivers are unenforceable for sexual assault and harassment disputes.
Military Service Members and Consumer Credit
The Military Lending Act prohibits creditors from including mandatory arbitration clauses in consumer credit products offered to active-duty service members and their dependents. Any agreement requiring a covered borrower to arbitrate a consumer credit dispute is unenforceable.3Office of the Law Revision Counsel. 10 USC 987 – Terms of Consumer Credit Extended to Members and Dependents This covers credit cards, payday loans, vehicle title loans, installment loans other than auto loans, and certain other credit products.4Consumer Financial Protection Bureau. Military Lending Act (MLA)
Broader Bills Have Not Passed
Congress has repeatedly considered legislation that would ban forced arbitration across all employment, consumer, and civil rights disputes. As of 2026, none of those broader proposals have become law. Federal statutory protections remain limited to the categories above.
Claims Outside the Agreement’s Scope
Even a valid arbitration agreement only covers the disputes described in its language. Not every disagreement between you and the other party necessarily falls within what you agreed to arbitrate.
A narrowly drafted clause covering disputes “arising from the performance of this contract” might not reach a personal injury on the company’s property, a defamation claim, or a dispute that predates the agreement. A broad clause covering “any and all disputes between the parties” is much harder to escape. Read the specific wording; it controls.
Small Claims Court Carve-Outs
Many consumer arbitration agreements let either party bring qualifying claims in small claims court instead of arbitration, as long as the claim stays within that court’s dollar limits. Major arbitration providers like the American Arbitration Association also have rules permitting parties to redirect qualifying disputes to small claims court. Small claims limits vary by state but generally range from a few thousand dollars up to $25,000. If your claim is small enough, check the agreement before assuming you’re locked into arbitration.
The Delegation Clause Trap
Some arbitration agreements contain a “delegation clause,” which says the arbitrator, not a judge, will decide whether the arbitration agreement itself is enforceable. If your agreement has one and you don’t challenge it correctly, the very question of whether you belong in arbitration gets decided by an arbitrator.
The Supreme Court addressed this in Rent-A-Center, West, Inc. v. Jackson. A delegation clause is treated as a separate agreement under the FAA. If you want a court to decide enforceability, you must specifically challenge the delegation clause itself, arguing, for example, that the delegation clause is unconscionable. A general argument that the entire arbitration agreement is unfair won’t do it. Without a targeted challenge to the delegation provision, the court will treat it as valid and send the enforceability question to the arbitrator.5Legal Information Institute. Rent-A-Center, West, Inc v Jackson, 561 US 63 (2010)
This trips up people who try to challenge arbitration agreements without a lawyer. If your agreement has a delegation clause and your opposition brief argues only that the overall agreement is unconscionable, the judge will likely send the whole thing to the arbitrator, including the question of whether the agreement should be enforced at all.
When the Other Side Has Waived Arbitration
A company that has the right to enforce arbitration can forfeit that right through its own conduct. This is called waiver, and it happens when a party acts inconsistently with an intent to arbitrate. The typical scenario: a company gets sued, participates in the lawsuit for months by filing motions, conducting discovery, and taking depositions, and then suddenly demands arbitration.
Courts look at the totality of the circumstances, including how long the party waited and how deeply it engaged with the litigation. The Supreme Court clarified in 2022 that you don’t need to prove you were harmed by the delay. The question is whether the party’s conduct was inconsistent with the right to arbitrate, not whether the other side suffered prejudice.6Supreme Court of the United States. Morgan v Sundance, Inc, 596 US 411 (2022) That ruling made waiver arguments easier to win, because previously many courts required a showing of actual harm.
What Class Action Waivers Mean for You
Many arbitration agreements include a separate clause that prevents you from joining or bringing a class action. Courts have consistently upheld these waivers. The Supreme Court ruled in 2011 that the FAA preempts state laws attempting to invalidate class action waivers in arbitration agreements.7Justia Law. AT&T Mobility LLC v Concepcion, 563 US 333 (2011) The Court extended that principle to employment in 2018, holding that employers can require workers to resolve disputes through individual arbitration rather than collective or class proceedings.8Supreme Court of the United States. Epic Systems Corp v Lewis, 584 US 497 (2018)
The practical impact is significant. When your individual claim is too small to justify a lawyer, a class action waiver effectively eliminates any remedy. This is where most people feel the real bite of arbitration, and it’s the area where legal challenges have had the least success. The one meaningful exception is the sexual assault and harassment statute discussed above, which voids joint-action waivers for covered claims.
How the Challenge Plays Out
If you believe your arbitration agreement is unenforceable, the process starts by filing your lawsuit in court as if the agreement didn’t exist. You are essentially forcing the other side to raise the issue.
The other party will almost certainly respond by filing a motion to compel arbitration under the FAA, presenting the signed agreement and asking the judge to send the dispute to an arbitrator.9Office of the Law Revision Counsel. 9 USC 4 – Failure to Arbitrate Under Agreement; Petition to United States Court You then file a written opposition setting out your arguments: unconscionability, scope limitations, waiver, a federal statutory exemption, or whatever fits your situation. The judge rules on the motion.
If the judge denies the motion, your lawsuit proceeds in court as a normal case. The other party may be able to appeal that denial, but the case moves forward in the meantime. This is the outcome you’re aiming for.
If the judge grants the motion and a party requests a stay, the court pauses the case rather than dismissing it. The Supreme Court held unanimously in 2024 that the FAA’s text requires the court to “stay the trial of the action” until arbitration concludes.10Supreme Court of the United States. Smith v Spizzirri, 601 US 472 (2024)11Office of the Law Revision Counsel. 9 USC 3 – Stay of Proceedings Where Issue Therein Referable to Arbitration The stayed case stays on the docket, so you can return to the same court after arbitration to confirm, challenge, or enforce the award without filing a new lawsuit.
Because delegation clauses, waiver, and the specific way you frame an unconscionability argument can each decide whether you stay in court or get sent to arbitration, this is not a filing to attempt alone if you have a serious claim. An attorney experienced with arbitration disputes will know which arguments to pair, which to target directly, and which the judge is required to decide before the arbitrator.