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California's Mandatory Arbitration Agreement Stopped in its Tracks

Last week, the U.S. District Court for the Eastern District of California granted a request for a preliminary injunction to prohibit the State of California from enforcing Assembly Bill 51 (AB 51) as to arbitration agreements governed by the Federal Arbitration Act (FAA).  AB 51 generally bars conditioning employment or employment-related benefits on the signing of an arbitration agreement covering claims under the California Fair Employment and Housing Act or the Labor Code.  The U.S. Chamber of Commerce and other business organizations filed this lawsuit, Chamber of Commerce of the U.S.A. v. Becerra, seeking to have AB 51 declared preempted by the FAA. The preliminary injunction will remain in place until the case is resolved on the merits.

For now, employers may continue to require employees to sign mandatory arbitration agreements (as long as they are subject to the FAA). 

© 2020 Mitchell Silberberg & Knupp LLP

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About this Author

Alfredo Ortega Civil Litigation Attorney MSK Law Firm
Associate

Obtained summary judgment on behalf of motion-picture production company and writer/director of one of the highest-grossing movies of all time on claims of breach of contract and fraud by plaintiffs alleging that defendants used their ideas without compensation.

Represented an international consumer electronics company in proposed nationwide class action alleging breaches of express and implied warranties, the Magnuson Moss Act, and state consumer protection statutes in connection with the sale of high definition televisions.

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