Written by Alfredo Ortega Last week, the U.S. District Court for the Eastern District of California granted a request for a preliminary injunction to prohibit the State of California from enforcing Assembly Bill 51 (AB 51) as to arbitration agreements governed by the Federal Arbitration Act (FAA). AB 51 generally bars conditioning employment or employment-related benefits on the signing of an arbitration agreement covering claims … Continue reading California’s Mandatory Arbitration Agreement Ban Stopped In Its Tracks
Written by Jeremy Mittman
Recently, we informed our readers about a new law making it more difficult to classify independent contractors as such. Unfortunately, that was just the tip of the iceberg. A number of additional new employment-related bills recently signed into law by Governor Gavin Newsom will have a negative impact on California employers. Unless specifically noted, these laws go into effect on January 1, 2020. MSK recommends that any employer with California employees should consult with their employment counsel to address questions regarding changes to current policies/procedures in light of these new laws. Continue reading “More Bad News For California Employers as Governor Signs Bills Into Law”
Written by Jeremy Mittman
California employers received mostly good news this past month on the arbitration front, with a trio of pro-employer arbitration-related rulings. The California Supreme Court’s recent ruling invalidating an employer’s arbitration agreement (discussed below) is a notable exception.
California Supreme Court Invalidates Employer’s Arbitration Agreement As Unconscionable.
In OTO LLC v. Ken Kho, the California Supreme Court ruled that an Oakland Toyota dealership’s arbitration agreement with a former employee was unenforceable and was so unfair and one-sided that it was procedurally and substantively unconscionable. “Arbitration is premised on the parties’ mutual consent, not coercion, and the manner of the agreement’s imposition here raises serious concerns on that score,” the majority opinion said. Continue reading “California Arbitration Roundup: Employers Are 3-1 For Favorable Arbitration Rulings”
California High Court Finds Another Exception to Enforcing Arbitration Agreements As Written
April 13, 2017
Many employers enter into pre-dispute arbitration agreements with their employees so that any future claims or disputes between the employer and the employee get resolved through binding arbitration, rather than a court of law. The United States Supreme Court has traditionally favored the enforcement of such arbitration agreements as written. This has included approving agreements that contain a waiver of the right to bring a class action in any forum, meaning that an employer and an employee must resolve all disputes in arbitration and on an individual, not class-wide, basis. This class action waiver is significant for employers because an employee is stopped from bringing any claim in court or arbitration to benefit and on behalf of any employees other than herself.
California courts have been reluctant to fully embrace pre-dispute arbitration agreements, even though they are generally required to follow U.S. Supreme Court pronouncements in this area. Although California’s highest court has finally accepted that class action waivers in arbitration agreements are enforceable, with its recent decision in McGill v. Citibank, it once again shows its willingness to find exceptions to avoid fully enforcing these agreements as written. Continue reading “What’s In Your Arbitration Agreement?”