By Jaimee K. Wellerstein, Esq.
On December 30, 2019, a federal court granted California employers a temporary reprieve from complying with AB 51 on January 1, 2020. AB 51 is the new law that would prohibit employers from requiring applicants and employees to enter into arbitration agreements as a condition of employment.
But, employers may only be safe for now. U.S. District Judge Kimberly Mueller halted enforcement of AB 51 until she considers a request by the California Chamber of Commerce and other business groups for a preliminary injunction on January 10th.
When AB 51 first passed in October 2019, it was questioned whether this California law would actually go into effect because other attempts at restricting arbitration have been struck down in the past as they conflicted with the Federal Arbitration Act (FAA). The Federal Court’s ruling today enforced that there are serious questions regarding whether AB 51 is preempted by the FAA.
Employer Takeaway: For now, California employers may still require applicants and employees to sign arbitration agreements as a condition of employment. However, the future of AB 51 is unknown at this time. Employers should pay close attention to developments in the coming few weeks. Your attorneys can help.
Contact your attorneys at Bradley & Gmelich LLP for advice regarding arbitration agreements or any other pressing employment law issue.