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California Appeals Preliminary Injunction Against State Ban on Employment Arbitration Agreements

The State of California has filed a notice of appeal of the district court’s decision granting a preliminary injunction enjoining the State from enforcing Assembly Bill 51 (AB 51) against employment arbitration agreements governed by the Federal Arbitration Act (FAA).

On January 31, 2020, the U.S. District Court for the Eastern District of California in Chamber of Commerce of the United States, et al. v. Becerra, et al., No. 2:19-cv-2456, granted the request for a preliminary injunction enjoining the State from enforcing AB 51. On February 7, 2020, the court issued its written order detailing its reasoning for granting the preliminary injunction. It ruled that the four factors required for a preliminary injunction were met:

  1. The likelihood of the plaintiffs succeeding on the merits of the case;

  2. The likelihood of irreparable harm to the plaintiffs absent a preliminary injunction;

  3. The balance of the equities; and

  4. Whether an injunction is in the public interest.

Now, the State has filed a notice of appeal of the district court’s decision to the U.S. Court of Appeals for the Ninth Circuit. (The State employed a similar strategy as to pending litigation concerning Assembly Bill 5, which relates to independent contractors.) The district court’s preliminary injunction will remain in place pending the appeal.

The State may move to stay the injunction pending the outcome of the appeal, as it attempted in the Assembly Bill 5 litigation (which was denied). That would allow it to enforce AB 51. Because the district court ruled all four factors for a preliminary injunction were met, however, a grant of a stay of the injunction by the Ninth Circuit appears unlikely as that would effectively eviscerate the preliminary injunction.

Jackson Lewis P.C. © 2020

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About this Author

Scott P. Jang, Jackson Lewis, wrongful termination lawyer, unfair competition attorney
Associate

Scott P. Jang is an Associate in the San Francisco, California, office of Jackson Lewis P.C. He represents management in all areas of employment law litigation.

Mr. Jang’s practice includes defending management in matters involving claims for breach of contract, discrimination, harassment, retaliation, wrongful termination, and unfair competition. He represents clients in both class action and single plaintiff cases.

Mr. Jang is particularly well-versed in federal litigation. Prior to...

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Samia Kirmani, Jackson Lewis Law Firm, Unemployment Counseling Attorney
Principal

Samia M. Kirmani is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. She concentrates her practice in employment counseling, training and litigation on behalf of management.

Ms. Kirmani provides practical legal advice to clients on various employment law issues, including discrimination, health and leave management, reductions in force, retaliation and whistleblower matters, individual separations, and employee relations issues. Ms. Kirmani also assists clients with policy creation, revision and implementation and routinely conducts management and employee trainings on topics in employment law, including sexual harassment prevention and best management practices. Ms. Kirmani also advises clients with respect to drafting and implementing national arbitration agreements.

Ms. Kirmani defends employers in employment-related litigation and administrative proceedings at the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination. Ms. Kirmani is a frequent speaker and addresses Legal and Human Resources audiences on current and various workplace law topics, such as paid sick leave, arbitration agreements and class action waivers, and employment discrimination.

 

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