After four long years of litigation, AB 51, intended to prohibit mandatory arbitration agreements, has been permanently enjoined. California companies may rejoice in a rare win allowing enforceable arbitration agreements to be a condition of employment, so long as the Federal Arbitration Act (“FAA”) governs the agreement. Most arbitration agreements contain this provision, but employers should check to confirm their agreements contain an FAA provision before making them mandatory. The biggest hurdle to mandatory arbitration agreements is now out of the way. The courts still will analyze arbitration agreements for procedural and substantive conscionability for plaintiffs unwilling to file in arbitration. Consult with counsel to ensure your arbitration agreement will withstand judicial scrutiny.
See some additional, practical tips for enforcing arbitration agreements, and making sure the claims stay in arbitration, here and here.