Among practitioners of employment law, the U.S. Court of Appeals for the Ninth Circuit has a general reputation for being more favorable to employees than to employers. After a recent ruling, however, that view might need some updating.

In Chamber of Commerce v. Bonta, the Ninth Circuit handed employers an unexpected gift when it ruled on a case involving a California statute known as AB 51. In a reconsidered panel decision, the court held that AB 51, which effectively barred most employer-mandated arbitration agreements, could not be enforced. Specifically, the court found that AB 51 was preempted by federal law in the form of the Federal Arbitration Act (FAA), which strongly encourages arbitration and restricts the ability of courts to limit the enforceability of arbitration agreements.

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