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ARTICLE · 14 FEBRUARY 2020

AB 51: Preliminary Injunction Granted

Seyfarth Shaw LLP
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Among other things, AB 51 makes it unlawful for employers to impose arbitration agreements on employees as a condition of employment, even if employees are permitted to opt out.

United StatesEmployment and HR
Elizabeth Levy
Elizabeth Levy
Rachel M. Abanonu
Rachel M. Abanonu
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Seyfarth Synopsis: Among other things, AB 51 makes it unlawful for employers to impose arbitration agreements on employees as a condition of employment, even if employees are permitted to opt out. AB 51 was quickly challenged on the ground that it is preempted by the Federal Arbitration Act (“FAA”). The lawsuit, which was brought by the United States and California Chambers of Commerce, as well as several trade associations, sought declaratory relief and a preliminary injunction to stop the relevant California government agencies from enforcing the law with respect to arbitration agreements subject to the FAA. On February 7, 2020, the Eastern District of California issued a detailed ruling explaining its decision to grant the motion for a preliminary injunction.

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