The California legislature is notoriously hostile to mandatory arbitration agreements in the employment context. That’s because the legislature believes employers have more negotiating power than employees; thus, the arbitration agreements that employers give to employees often have one-sided terms that heavily favor the employer. The employee often feels that he has little choice and must… Read More
Posts Tagged With: arbitration
Employers Beware: Don’t Allow Employees to e-Sign Arbitration Agreements
Many (wise) California employers use arbitration agreements requiring employees to submit any future employment-related dispute to mandatory arbitration. Arbitration is typically favored by employers because it is cheaper, faster, and more private than litigation. There’s also the perception that arbitrators are more conservative and less emotional than jurors, which employers believe translates into more friendly… Read More
Federal Court Blocks Implementation of CA’s Anti-Arbitration Statute AB 51
In a rare win for California employers the Ninth Circuit Court of Appeals recently ruled that AB 51 could not be enforced in California because it unduly burdened the right to agree to arbitration in violation of the Federal Arbitration Act (“FAA”). AB 51 is the California statute that, in effect, prevented employers for asking… Read More
U.S. Supreme Court Delivers Bombshell PAGA Ruling in Favor of Employers
On June 15, 2022, in a blockbuster case known as Viking River Cruises, Inc. v. Moriana, the U.S. Supreme Court finally answered a burning employment law issue here in California – whether California’s rule prohibiting the use of arbitration agreements to force an employee to waive her right to bring a representative action under PAGA… Read More
Federal Court Reinstates Ban on Employment Arbitration Agreements in California – For Now
In 2019, AB 51 is Passed As readers of this blog know, in 2019 the California legislature passed AB 51, a new law that added Section 432.6 to the California Labor Code. This new statute made it illegal for an employer to require an applicant or employee, as a condition of employment, to sign an… Read More
Note to Employers: Craft Your Arbitration Agreements Carefully
A recent Court of Appeal decision underscores the importance of reviewing severability provisions in arbitration agreements. In Kec V. Superior Court, Plaintiff Nichole Kec brought individual, class, and Private Attorneys General Act (“PAGA”) claims against her former employer, defendants R.J. Reynolds Tobacco Company and Reynolds American, Inc. (“Reynolds”), as well as three individual employees at… Read More
Employers, Beware: Right to Arbitrate can be Waived
Arbitration agreements that are well-drafted and “state-of-the-art” under current California law are key to ensuring that employment disputes will be resolved by final and binding arbitration. But a recent California Court of Appeal case – Fleming Distribution Co. v. Younan (Cal. Ct. App., May 15, 2020, No. A157038) 2020 WL 2511680 – is a cautionary… Read More
Court Blocks AB 51 From Taking Effect on January 1, 2020
AB 51 was signed by Governor Newsom back in October 2019. AB 51 generally prohibited employers from requiring employees, as a condition of employment, to agree to arbitrate any future Labor Code claims and/or Fair Employment and Housing Act (“FEHA”) claims. AB 51 also made it illegal for employers to use an “opt out” provision… Read More
SCOTUS Rules Employees Cannot Band Together in Class Arbitrations
In yet another split 5-4 decision, the U.S. Supreme Court ruled in Lamps Plus v. Varela that employees at a California business could not band together in a class-wide arbitration. Instead, the Supreme Court ruled, each employee was required to proceed independently in an individual arbitration. The Supreme Court acknowledged that the arbitration agreement that… Read More
One Day, Two Opposite Results in Arbitration Cases
On the same day, two different California appellate courts reached opposite conclusions as to whether an employer’s arbitration agreement was enforceable or not. Subcontracting Concepts v. DeMelo — Arbitration Agreement Void and Unenforceable In one case, Subcontracting Concepts, LLC v. DeMelo, the Court found that the arbitration agreement was both procedurally and substantively unconscionable and, therefore, unenforceable…. Read More
