Earlier this week, a Ninth Circuit panel sided with a coalition of business groups to affirm a preliminary injunction that stopped California state officials from enforcing California's AB 51, a 2019 law that would have effectively prevented the formation of employment arbitration agreements in California. (Mayer Brown lawyers filed the lawsuit on behalf of the U.S. Chamber of Commerce and the California Chamber of Commerce and led briefing and argument in the Ninth Circuit.) This decision eliminates the considerable uncertainty about the use of arbitration to resolve employment disputes that had been caused by the enactment of AB 51 and makes clear that California may not circumvent the FAA's requirement that arbitration agreements be enforced by trying to block their formation on the front end.
This Legal Update that my colleagues and I authored provides more information about the case and the Ninth Circuit's new opinion.
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