California Ban on Employment Arbitration Gets Senate Approval

The California Senate approved legislation this week, AB 465, which would prohibit most employers from making employees agree to arbitrate disputes as a condition of employment.  The bill would also allow for injunctive relief and attorneys fees for violations.

The Assembly is expected to affirm the bill, which would then go to Governor Brown.  The bill is backed by the California Labor Federation.  The Recorder reported that Caitlin Vega, a lobbyist for the labor federation, said that her organization became more aware of the issue this last year as arbitration agreements increasingly surfaced in documents given to new employees in low-income positions such as car-washers and janitors.  According to the Recorder, Vega described workers being turned away from the Labor Commissioner’s office because they had signed an agreement that they did not even know they had signed.

The bill faces staunch opposition from the Civil Justice Association of California and the California Chamber of Commerce, who argue that the bill will clog courts and are likely pre-empted by the Federal Arbitration Act.

Ultimately, should the bill pass, employees will have better secured rights to a jury trial in a court of law in the event of a dispute with their employer.  The inequity of employment arbitration clauses is ripe for reversal.

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