On January 31, 2020, a federal court granted a preliminary injunction blocking enforcement of Assembly Bill 51 (“AB 51”). Set to take effect January 1, 2020, AB 51 prohibits mandatory arbitration of most employment-related claims and bars employers from threatening, retaliating, or discriminating against any applicant or employee because they decline to sign arbitration agreements (or waive other rights under the Labor Code or Fair Employment and Housing Act).

As discussed in prior posts, California trade associations filed suit in December 2019 to prevent the law from taking effect. The groups argued that the Federal Arbitration Act (“FAA”) preempted AB 51. On December 30, 2019, a California federal court issued a temporary restraining order that prevented enforcement of the law. On January 31, 2020, the court extended that reprieve by granting a full preliminary injunction. The injunction blocks the state of California from enforcing the law while litigation over the validity of AB 51 proceeds.

As a practical matter, California employers may continue to require employees to sign arbitration agreements. Nevertheless, we recommend that employers closely monitor developments over the coming months as litigation surrounding AB 51 continues.

Author: Caitie Emmett, Associate.

The Maier Law Group helps companies ensure that their policies and practices comply with the relevant workplace regulations.  Please contact us at info@maierlawgroup.com for more information.

This article has been prepared for general informational purposes only and does not constitute advertising, solicitation, or legal advice. If you have questions about a particular matter, please contact the Maier Law Group directly.