On January 31, 2020, a U.S. District Court preliminarily enjoined the enforcement of Assembly Bill 51 (AB 51) against arbitration agreements governed by the Federal Arbitration Act (FAA).  As enacted, AB 51 would prohibit employers from conditioning employment (including continued employment) or employment-related benefits on an individual signing a mandatory arbitration agreement for disputes arising under the California Fair Employment and Housing Act or the California Labor Code. The State of California (“the State”) appealed the District Court’s decision to the Ninth Circuit Court of Appeals.

On May 18, 2020, the State filed a 66-page opening brief with the Ninth Circuit. The State raises four main arguments, with the thrust being that the District Court erred when it concluded that AB 51 was likely preempted by the FAA.

The State sets forth several arguments regarding why FAA preemption does not apply, with an emphasis on the argument that the AB 51 does not implicate the FAA because the FAA applies to arbitration agreements whereas AB 51 applies to employer policies and practices, particularly practices relating to “forc[ing] workers into waivers as a condition of employment . . .” In other words, the State attempts to draw a distinction between regulating agreements and regulating conduct.

The U.S. Chamber of Commerce is slated to file its Answering Brief on June 17, 2020.

Jackson Lewis will continue to monitor the litigation involving AB 51 and related issues pertaining to arbitration agreements. If you have questions about arbitration agreements or related information, reach out to a Jackson Lewis attorney.

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Photo of Scott P. Jang Scott P. Jang

Scott P. Jang is a principal in the San Francisco, California, office of Jackson Lewis P.C. He represents management in all areas of employment law, with particular focus on class actions and complex litigation. Scott is a member of the firm’s California Class…

Scott P. Jang is a principal in the San Francisco, California, office of Jackson Lewis P.C. He represents management in all areas of employment law, with particular focus on class actions and complex litigation. Scott is a member of the firm’s California Class and Private Attorneys General Act (PAGA) Action group, as well as a member of the California Advice and Counsel resource group.

Scott’s litigation experience covers the full spectrum of employment law. He has experience defending employers against claims for alleged discrimination, harassment, retaliation, wrongful termination, and unfair competition. He also has experience defending employers against various wage and hour claims, including claims for alleged overtime, meal and rest breaks, and business expense reimbursement. Scott’s trial practice includes having served as second chair in a bench trial in the U.S. District Court for the Northern District of California, in which a national beverage manufacturer fully prevailed on all claims for alleged misclassification. He has also served as first chair in several arbitrations for a national retailer for alleged wage and hour violations.

Photo of Sierra Vierra Sierra Vierra

Sierra Vierra is a principal in the Salt Lake City, Utah, office of Jackson Lewis P.C. Sierra focuses her practice on workplace safety and health matters and has substantial and in-depth experience in civil litigation and administrative proceedings involving employment law matters, including…

Sierra Vierra is a principal in the Salt Lake City, Utah, office of Jackson Lewis P.C. Sierra focuses her practice on workplace safety and health matters and has substantial and in-depth experience in civil litigation and administrative proceedings involving employment law matters, including discrimination, harassment, retaliation, wrongful termination, and wage and hour issues.