We previously reported, on December 30, 2019, that a California federal judge had issued a temporary restraining order delaying enforcement of California Assembly Bill 51 (“AB 51”). Intended to take effect on January 1, 2020, AB 51 broadly prohibits California employers from requiring a job applicant or employee, as a condition of employment, continued employment, or receipt of any job-related benefit, to “waive any right, forum, or procedure” for redressing a violation of any provision of the California Fair Employment and Housing Act or California Labor Code.
On January 10, 2020, the same federal judge ordered that the temporary restraining order will remain in effect until January 31, 2020, to give the litigants additional time to submit legal arguments. However, the judge also limited the scope of the restraining order by clarifying that California government officials are currently prohibited from enforcing AB 51 only “to the extent it applies to arbitration agreements covered by the Federal Arbitration Act.” There is some ambiguity in this phrase, because AB 51, by its own terms, already does not apply to agreements that are “otherwise enforceable under the Federal Arbitration Act.”
Employers are advised to consult with qualified legal counsel before proceeding with mandatory workplace arbitration agreements in light of this ruling.
SHLC will continue to monitor this situation and post blog updates as new developments unfold.