New California Law Limits An Employers' Ability to Require Mandatory Arbitration Agreements

Earlier this month, Governor Newsom signed Assembly Bill 51 (AB 51). AB 51 goes into effect on January 1, 2020 and limits an employers’ ability to require employees to sign new mandatory arbitration agreements for employment disputes arising under the California Labor Code or the California Fair Employment and Housing Act. Specifically, under AB 51, employers will no longer be able to require an agreement to arbitrate employment claims as a condition of employment, a condition of continued employment, or a condition to receive any employment-related benefits. It is anticipated that AB 51 will be challenged on the grounds that it is preempted by the Federal Arbitration Act (FAA)..