California employers are wondering whether to ask their employees to participate in a mandatory arbitration program do not have an easy task. They must consider the benefits and risks of arbitration and the impact that arbitration agreements can have on employee morale. In addition, employers must consider the applicability of arbitration agreements. The law on binding arbitration agreements for the working relationship is not clear in some areas. But there are a few general principles that employers should consider before implementing a mandatory arbitration program. Seyfarth Synopsis: Everything was smooth sailing with your last biggest arbitration agreement, but then an employee refused to board. What are you doing now? Keep reading for a primer to navigate some murky waters. Yes, yes. The law prohibits the conditioning of arbitration on “employment, maintenance of employment or the maintenance of an employment-related benefit” and applies to both candidates and employees.
However, a coalition of professional associations filed an appeal in the Federal Court in December, before the law could come into force on January 1, 2020, claiming that the law is anticipated by the Federal Arbitration Act (FAA). In December, the Federal Court issued a referral order, which was excluded from coming into force at age 51 and imposed the application of the FAA Arbitration Agreements Act on February 7, 2020. The state of California is now appealing the decision to the Ninth Court of Appeals. Therefore, the validity of this law is still in question. New covid-19 realities may further delay this process. Ogletree Deakins will continue to monitor and consolidate the litigation with AB 51. As a general rule, almost all rights arising from a working relationship can be subject to arbitration by appointment. The filing of a right to arbitration must be the subject of a specific decision under the arbitration agreement laws. In California, these laws include the California Arbitration Act (“CAA”) (Code of Civil Procedure Section 1280 ff) and the Federal Arbitration Act (“FAA”) (9 U.S.C. Sections 1-14).