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Arbitration
9th Circuit blocks California’s ban on forced arbitration agreements in workplace disputes
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A federal appeals court on Wednesday blocked a California law that makes it a crime to require employees to sign agreements for arbitration of workplace disputes.
The 9th U.S. Circuit Court of Appeals at San Francisco ruled that the law was preempted by the Federal Arbitration Act, report Reuters and Courthouse News Service. How Appealing linked to the Feb. 15 decision.
The 9th Circuit had previously upheld parts of the California law. But it withdrew the opinion and granted a rehearing after the U.S. Supreme Court found that parts of a different law were preempted, according to Courthouse News Service.
The California law, known as Assembly Bill 51, passed in 2019, made it a crime to require employees or job seekers to agree to arbitration. But it did not make mandatory arbitration clauses unenforceable in an attempt to avoid the preemption issue, according to Courthouse News Service.
Judge Sandra Ikuta wrote the majority opinion for the 9th Circuit panel.
“Because the FAA’s purpose is to further Congress’ policy of encouraging arbitration, and AB 51 stands as an obstacle to that purpose, AB 51 is therefore preempted,” Ikuta wrote.
Judge William Fletcher had voted to upold parts of AB 51 in the prior opinion. He switched his stance after the rehearing and joined Ikuta’s opinion.
The U.S. Chamber of Commerce was among the groups that challenged the law.
The case is Chamber of Commerce v. Bonta.
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