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Mandatory Arbitration Agreements Are Back!

by Jennifer Shaw | | February 16, 2023

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.

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