California Continues to Fight Back Against Forced Arbitration

As forced arbitration clauses continue to proliferate, facilitated by several rulings from the United States Supreme Court, California continues to fight back.

In the latest volley, Gov. Gavin Newsom recently signed into law two bills, Assembly Bill 51 and Senate Bill 707, that take aim at forced arbitration. One, AB 51, broadly prohibits employers from conditioning employment on the employee’s agreement to waive his or her right to enforce various employment violations in court, and the other, SB 707, imposes substantial penalties on parties who successfully petition to compel arbitration and then stall on paying the fees. Both laws are set to take effect on January 1, 2020, and likely face preemption fights.

AB 51 adds Section 432.6 to the Labor Code and 12953 to the Government Code. The key provisions in AB 51 bar an employer making a person’s “employment, continued employment, or the receipt of any employment-related benefit” contingent on the employee’s agreement to “waive any right, forum or procedure” to pursue violations of the Fair Employment and Housing Act (FEHA) or the Labor Code, including the right to sue in court. An employer also cannot “retaliate or discriminate against or terminate” any employee or applicant for refusing to consent to a waiver prohibited by the law.

Both AB 51 and SB 707 represent fairly bold steps in combating the abuses of forced arbitration. Prior similar efforts were vetoed by former Gov. Jerry Brown, but the new governor must see things differently. Now the fate of these laws will be decided by the courts.

By Jeremy K. Robinson, CaseyGerry – The Los Angeles Daily Journal

Jeremy K. Robinson is a partner at the San Diego law offices of Casey Gerry Schenk Francavilla Blatt & Penfield LLP, and chair of the firm’s motion and appellate practice.