My last column focused on a California Court of Appeal ruling that confirmed it is easier for an employer to enforce a pre-dispute arbitration agreement when the employee signs the agreement in his or her own handwriting rather than with an electronic signature.
In addition to having its employees sign the arbitration agreement in their own handwriting, the employer in that case expressly gave applicants and employees the option not to sign the arbitration agreement and still obtain or retain employment. I suggested employers consider giving employees the express right to opt out until resolution of a pending challenge to California’s statute prohibiting employers from requiring employees to sign pre-dispute arbitration agreements (AB 51).
On Feb. 15, a split three-judge panel of the U.S. Court of Appeals for the 9th Circuit struck down AB 51 as preempted, that is trumped, by the Federal Arbitration Act (FAA). That was a reversal of a ruling of the same panel almost a year and a half ago upholding the law.
Here’s why the court ruled as it did and three reasons it still may make sense for employers to give employees the option not to sign pre-dispute arbitration agreements.
Why the 9th Circuit invalidated AB 51
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