Employers: California Assembly Bill 51 on Hold For Now

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We previously highlighted Assembly Bill 51, which prohibits employers from requiring employees or applicants for employment to “waive any right, forum, or procedure for a violation” of the Fair Employment and Housing Act or the Labor Code as a condition of employment, continued employment, or receipt of any employment-related benefit. The bill was set to take effect January 1, 2020, although the bill’s author acknowledged it could be challenged in court as being preempted by the Federal Arbitration Act.

On December 29, 2019, the United States District Court for the Eastern District of California entered a temporary restraining order enjoining the enforcement of AB 51 pending a preliminary injunction hearing. In granting the order the court found “plaintiffs have raised serious questions regarding whether the challenged statute is preempted by the Federal Arbitration Act…”

The Court went on to find that “allowing the statute to take effect even briefly, if it is preempted, will cause disruption in the making of employment contracts…particularly given the criminal penalties to which violators of the law may be exposed.”

The hearing on the preliminary injunction is scheduled for January 10, 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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