Employment Law Update – California’s Prohibition Against Mandatory Arbitration Agreements Remains On Hold

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by Gerald Sauer

Last Friday, a federal judge ordered that the temporary restraining order precluding the State of California from enforcing Assembly Bill 51 (“AB 51”), the new law that prohibits mandatory arbitration agreements in the employment context, shall remain in place for now.  The judge initially granted a temporary restraining order on December 30, 2019, just two days before the law was to go into effect.  In addition to extending the stay precluding implementation of the new law, the judge also ordered supplemental briefing to determine if the stay will remain in effect until she rules on the merits of whether the new law is preempted by the Federal Arbitration Act.  At this point, California’s new law remains in limbo, and a final resolution may not occur this year or longer depending upon how quickly it takes this dispute to wind its way through the federal judicial system.      

We will provide updates as the story progresses.  In the meantime, if you have any questions about this latest development, please contact us.