On December 30, 2019, Judge Kimberly Mueller in the Eastern District of California issued a temporary restraining order that enjoined California from enforcing AB 51. AB 51 prohibits employers from requiring, as a condition of employment, employees’ waiver of any right, forum, or procedure for an alleged violation of the California Fair Employment and Housing Act or the California Labor Code. (For more on AB 51, read here).
Judge Mueller held, in particular, that the plaintiffs (including the Chamber of Commerce and the California Retailers Association) “have raised serious questions regarding whether the challenged statute is preempted by the Federal Arbitration Act as construed by the United States Supreme Court,” citing Kindred Nursing Centers Ltd. P’ship v. Clark, 137 S.Ct. 1421 (2017). Readers may recall that former Governor Brown cited the same Supreme Court case when he vetoed a similar bill in 2018, noting that it “plainly violates federal law.” A hearing on the plaintiffs’ motion for a preliminary injunction is set for January 10, 2020, so stay tuned for further developments.
Meanwhile, if you have questions regarding AB 51 or its potential impact on your company’s arbitration agreement, please contact your Baker McKenzie employment lawyer.