February 5, 2023

Volume XIII, Number 36

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February 03, 2023

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The California Senate Passes a Bill That May Abolish Arbitration Agreements

On August 24, 2015, the California Senate passed measure AB-465 which prevents employers from requiring employees to sign an arbitration agreement as a condition of employment. The Senate approved this measure by a vote of 22-15. In support of this measure, Democratic Assemblyman Roger Hernandez stated, “No worker should be forced to choose between a job and giving up core labor rights and procedures.” 

Further, the California Labor Federation acknowledged that arbitration can work well when both parties pay a role in selecting an arbitrator and the rules governing the dispute. However, it noted that a potential flaw of the arbitration process may arise if a worker unknowingly submits to an arbitration process unilaterally designed by an employer, thus binding the employee to a decision made by an arbitrator who is paid by the employer. The California Labor Federation also stated arbitration agreements are problematic when required of employees who cannot read or understand the agreements or when the agreements are in small print or buried in a handbook.

If AB-465 becomes law, it will drive up litigation costs for employers and overburden the judicial system. There is current law that the Court applies to determine whether an arbitration agreement is enforceable. 

Jackson Lewis P.C. © 2023National Law Review, Volume V, Number 245

About this Author

Christopher Habashy, Employment Disputes Lawyer, Wrongful Termination Attorney, Jackson Lewis

Christopher M. Habashy is an Associate in the Los Angeles, California, office of Jackson Lewis P.C. He represents management in all types of employment disputes including harassment, discrimination, retaliation, and wrongful termination cases in both state and federal court as well as in arbitration and administrative hearings.

Mr. Habashy also defends employers in wage and hour matters, including class and representative action lawsuits. In addition, Mr. Habashy provides advice and counsel to clients on a variety of...

Adam Siegel, Employment Attorney, Whistleblower claims, Jackson Lewis Law FIrm

Adam Y. Siegel is a Shareholder in the Los Angeles, California office of Jackson Lewis P.C.

Mr. Siegel focuses mainly in employment litigation and represents both private and public sector employers in all aspects of employment law, specializing in litigation and trial of harassment, discrimination, breach of contract, wage/hour, due process, and other employment related claims and has litigated cases in both state and federal court.  As part of his extensive public sector experience, Mr. Siegel has conducted and prepared Investigation Reports pursuant to the California Government...