California employers won yet another important victory Friday in the fight to allow the use of mandatory employment arbitration agreements in California. See our previous articles on AB-51 here and here. In December, the California Chamber of Commerce filed a lawsuit challenging AB-51 because it runs afoul of federal arbitration law.
In late December, a federal court in California issued a temporary restraining order blocking AB-51 from taking effect on January 1, 2020 pending an additional hearing scheduled for last Friday. During Friday’s hearing, the court decided the ban on AB-51 should stay in effect until at least January 31, 2020 as the judge further considers arguments from the state and additional case law on the subject matter. The court previously expressed serious concerns regarding whether the new law is preempted by the Federal Arbitration Act and concerns over how this new law will disrupt the current employment agreement process and potentially send a flood of cases to an already over-crowded civil court system. Therefore, the court ruled that the current ban will stay in place, at least for the remainder of the month, and ideally, through this litigation.
We will continue to monitor this important case and provide further updates as the litigation develops. For now, AB-51 has no authority over California employers. Stay tuned for future E-Blasts from the employment law experts at The Saqui Law Group, a Division of Dowling Aaron Incorporated.