Judge Orders Emergency Halt of AB 51 Employment Arbitration Law

Ervin Cohen & Jessup LLP
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Ervin Cohen & Jessup LLP

A federal judge issued a temporary restraining order on Monday, December 30, to halt enforcement of California’s Assembly Bill 51 (AB 51), which was scheduled to go into effect on January 1, 2020. AB 51 would have prevented employers from requiring employees to enter arbitration agreements as a condition of their employment for claims brought under California’s Fair Employment and Housing Act and the Labor Code. AB 51 also would allow workers to pursue damages and attorneys’ fees and open employers up to criminal enforcement of up to six months imprisonment for violating AB 51’s requirements.

Earlier in December, a coalition of businesses led by the California Chamber of Commerce (CalChamber) sued and asked the court for emergency relief to stop the bill from taking effect. CalChamber argued in its motion for preliminary injunction that businesses could suffer irreparable harm by continuing to require arbitration in the good faith belief that AB 51 is preempted by the Federal Arbitration Act and is unconstitutional.

U.S. District Judge Kimberly Mueller agreed with the businesses that they had raised “serious questions” about AB 51 and fast-tracked oral arguments on CalChamber’s motion up to January 10, 2020. If the motion is granted, it could indefinitely delay implementation of AB 51. In the meantime, the status quo remains in place until the motion is heard, a small New Year’s gift for employers.

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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