Some good news for California employers. Recently, the U.S. Court of Appeals for the Ninth Circuit ruled that California employers can require employees and applicants to sign arbitration agreements as a condition of employment, reversing its own prior decision which vacated U.S. District Court for the Eastern District of California’s grant of a preliminary injunction against enforcement of Assembly Bill 51 (AB 51).
By way of background, AB 51, which was signed into law in 2019 and codified in California Labor Code § 432.6, was enacted to protect employees from “forced arbitration” by making it a criminal offense for an employer to require an employee or applicant for employment to consent to arbitrate specified claims a condition of employment. After the District Court granted preliminary injunction against enforcement of AB 51 in January 2020, in September 2021, a divided three-judge panel of the Ninth Circuit Court vacated the preliminary injunction, which was the subject of a previous client alert.
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