Employers will recall that California passed a law in October, 2019 (AB 51) that would limit the ability of employers to require mandatory arbitration of certain statutory employment claims as of January 1, 2020. Specifically, AB 51 provided that employers could no longer require, as a condition of employment, that a job applicant or employee arbitrate any alleged violation of the California Fair Employment and Housing Act or the California Labor Code. After AB 51 was passed, a coalition of business groups led by the U.S. Chamber of Commerce filed a lawsuit seeking to block AB 51 from taking effect.
On December 30, 2019, Judge Kimberly Mueller of the Eastern District of California granted a temporary restraining order in response to that lawsuit, which effectively blocks AB 51 from going into effect until the Court holds a preliminary injunction hearing on January 10, 2020. At the January 10 hearing, the Court will decide whether to grant a preliminary injunction that would block implementation of AB 51 until the case is fully resolved. As a result of the Court’s temporary restraining order, at least as of right now, it still is lawful to continue requiring employees to sign arbitration agreements. But please be aware that the lawsuit challenging AB 51 is moving quickly so employers with California employees should continue to monitor this lawsuit.