The U.S. Court of Appeals for the Ninth Circuit struck down the California Legislature’s latest attempt in a prolonged effort to limit employers’ ability to make arbitration of all disputes a condition of employment. In an opinion issued on February 15, 2023, the Ninth Circuit ruled that the law, Assembly Bill 51, is preempted by the Federal Arbitration Act (FAA) because the law created an obstacle to arbitration that conflicted with the FAA’s broad mandate in favor of arbitration.
A.B. 51 was first enacted in October 2019 and was set to take effect on January 1, 2020. Rather than prohibit arbitration provisions outright, the law made it a criminal offense for an employer to require an employee or applicant to agree to an arbitration provision as a condition of employment, and further provided that an agreement that required an employee to opt out of a waiver or take any affirmative action to preserve their rights was deemed a condition of employment.
On December 30, 2019, the U.S. District Court for the Eastern District of California enjoined enforcement of A.B. 51 on the grounds that the law was preempted by the FAA. That decision was appealed to the Ninth Circuit, which issued an initial opinion on September 15, 2021. The majority opinion held that A.B. 51 is not preempted by the FAA because it purports to do no more than require that arbitration agreements entered into between employers and employees be voluntary and consensual. In the meantime, the U.S. Supreme Court...
US President Donald Trump can shock people. And he did just that eleven minutes into his 40-minute address at the United Nations General Assembly (UNGA) on Tuesday (September 22). “Will a deal be ...