Federal Judge Issues Preliminary Injunction Blocking State's Enforcement of New Law Banning Mandatory Employee Arbitration Agreements

Three judges sitting behind bench

Judge Kimberly Mueller issued a preliminary injunction "in full" preventing California from enforcing AB 51.

February 24, 2020
Amy R. Patton, Jeffrey K. Brown & Tyler B. Runge - Payne & Fears

On January 31, 2020, Judge Kimberly Mueller issued a preliminary injunction "in full" preventing the State of California from enforcing AB 51, the state's new law effectively banning mandatory employee arbitration agreements.

As we previously reported, AB 51 adds section 432.6 to the Labor Code and section 12953 to the Government Code, which together prohibit employers from requiring an employee, as a condition of employment, continued employment, or receipt of employment-related benefits, to waive any right, forum, or procedure to pursue a claim under the California Fair Employment and Housing Act or the Labor Code. In other words, AB 51 bans mandatory employment arbitration agreements for employment-related claims.

In early December 2019, the U.S. Chamber of Commerce and a coalition of business organizations sued the state of California in federal court in a bid to have AB 51 declared preempted --- and therefore unenforceable --- by the Federal Arbitration Act. The case is Chamber of Commerce of the United States v. Becerra, Case No. 2:19-cv-2456 KJM DB (E.D. Cal.).

On December 30, 2019, Judge Mueller issued a temporary restraining order preventing the state from enforcing AB 51 pending the resolution of plaintiffs' motion for a preliminary injunction. You can read our report here.

Reprinted courtesy of Payne & Fears attorneys Amy R. Patton, Jeffrey K. Brown and Tyler B. Runge
Ms. Patton may be contacted at arp@paynefears.com
Mr. Brown may be contacted at kb@paynefears.com
Mr. Runge may be contacted at tbr@paynefears.com



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