California’s Upcoming Ban on Mandatory Arbitration Agreements Temporarily Blocked by Federal Judge

Dec 31, 2019

California’s Upcoming Ban on Mandatory Arbitration Agreements Temporarily Blocked by Federal Judge

By Jaimee K. Wellerstein, Esq.

On December 30, 2019, a federal court granted California employers a temporary reprieve from complying with AB 51 on January 1, 2020. AB 51 is the new law that would prohibit employers from requiring applicants and employees to enter into arbitration agreements as a condition of employment.

But, employers may only be safe for now. U.S. District Judge Kimberly Mueller halted enforcement of AB 51 until she considers a request by the California Chamber of Commerce and other business groups for a preliminary injunction on January 10th.

When AB 51 first passed in October 2019, it was questioned whether this California law would actually go into effect because other attempts at restricting arbitration have been struck down in the past as they conflicted with the Federal Arbitration Act (FAA). The Federal Court’s ruling today enforced that there are serious questions regarding whether AB 51 is preempted by the FAA.

Employer Takeaway: For now, California employers may still require applicants and employees to sign arbitration agreements as a condition of employment. However, the future of AB 51 is unknown at this time. Employers should pay close attention to developments in the coming few weeks. Your attorneys can help.

Contact your attorneys at Bradley, Gmelich & Wellerstein LLP for advice regarding arbitration agreements or any other pressing employment law issue.

Jaimee Wellerstein

Jaimee K. Wellerstein, Esq. is a Partner and the firm’s Employment Team Head. Representing employers in all aspects of employment law, Ms. Wellerstein collaborates with her clients to develop proactive business and legal strategies to try to avoid workplace conflict and employment disputes. She provides legal advice and counsel to numerous businesses, including conducting individualized training programs for both management and employees. Ms. Wellerstein performs internal audits of her clients’ employment practices to ensure compliance with the rapidly-changing world of employment laws, and guides investigations of employee allegations regarding harassment, discrimination, and employee misconduct.
When litigation cannot be avoided, Ms. Wellerstein aggressively defends her clients against employment law claims in the state and federal courts, as well as at administrative hearings, arbitrations, and mediations. Having defended numerous representative and individual lawsuits on behalf of her clients, Ms. Wellerstein is a skilled litigator and negotiator with a broad spectrum of experience upon which to draw.
A frequent speaker on numerous topics, including employment law and contract law, Ms. Wellerstein regularly conducts training seminars and programs for managers and employees in all areas of employment practices and policies.