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California - Arbitration Permitted

On February 3, 2020, Chief District Judge Kimberly J. Mueller of the U.S. District Court for Eastern California released a minute order granting the plaintiff’s preliminary injunction and thus prohibiting the enforcement of CA A.B. 51.

A.B. 51, scheduled to take effect on January 1, 2020, would have prohibited employers from requiring, as a condition of employment, employees’ waiver of any right, forum or procedure for a violation of any provision of the California Fair Employment and Housing Act or the Labor Code.

Specifically, the minute order stops the California Labor Commissioner from enforcing:

  • Cal. Labor Code § 432.6(a), (b), and (c) where the alleged “waiver of any right, forum, or procedure” is the entry into an arbitration agreement covered by the Federal Arbitration Act (FAA); and
  • Cal. Govt. Code § 12953 where the alleged violation of Cal. Labor Code § 432.6 is entering into an arbitration agreement covered by the FAA.

The court will release a more detailed, written order and the case may continue all the way up to the U.S. Supreme Court; however, at this time, CA A.B. 51 is unenforceable.