The district court in Chamber of Commerce of the United States, et al. v. Becerra, et al., E.D. Cal. Case No. 2:19-cv-2456, granted the request for a preliminary injunction enjoining the State of California from enforcing Assembly Bill 51 (AB 51) with respect to arbitration agreements governed by the Federal Arbitration Act (FAA).
AB 51 generally prohibits conditioning employment or employment-related benefits on the signing of an arbitration agreement covering claims under the California Fair Employment and Housing Act or Labor Code. The U.S. Chamber of Commerce and other business organizations filed this lawsuit against the State of California seeking to have AB 51 declared preempted by the FAA. The preliminary injunction issued today will remain in place until the case is resolved on the merits.
In its minute order granting the preliminary injunction, the court indicated that it will issue a detailed, written order explaining its reasoning “in the coming days.”
Jackson Lewis attorneys will continue to monitor developments pertaining to AB 51. In the meantime, employers should contact a Jackson Lewis attorney if they would like to discuss the implications of the latest ruling or for assistance in drafting California-compliant employment arbitration agreements.
For more on the Chamber of Commerce case and Assembly Bill 51 see Jackson Lewis’s prior articles:
California Bar on Mandatory Arbitration Agreements in Employment Temporarily Enjoined
New California Law Attacks Mandatory Arbitration Again … But Is It More Bark Than Bite?