ARTICLE
20 March 2023

Mandatory Arbitration Agreements Are Back!

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Shaw Law Group

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Jennifer Shaw and her team have built a reputation on helping employers stay out of court. Clients rely on Shaw Law Group for practical advice, engaging training sessions, impartial investigations, and decades of experience and expertise to navigate the most difficult and complex of workplace law situations.
The 9th Circuit just delivered some good news to California employers: they may now force employees to sign arbitration agreements as a condition of employment.
United States California Litigation, Mediation & Arbitration

The 9th Circuit just delivered some good news to California employers: they may now force employees to sign arbitration agreements as a condition of employment. In 2019, the California Assembly enacted AB 51 to protect employees from "forced arbitration" by making it crime to require an existing employee or applicant to consent to arbitrate workplace disputes. This week, the Court determined that AB 51 is preempted by the Federal Arbitration Act, which precludes states like California from enacting any laws that discriminate against arbitration by discouraging or prohibiting the formation of an arbitration agreement.

The decision could be appealed, but the Court's reasoning is pretty solid.

So, what should you do now? If you don't have an arbitration program in place, call your favorite employment attorney. Now. And if you do, be sure your agreement is properly drafted. You still may not want to make arbitration mandatory, perhaps for workplace culture reasons, but it's nice to know you have that option.

Read the case here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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