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ARTICLE · 25 AUGUST 2026

There They Go Again! California Launches Another Attack On Arbitration

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California employers relying on arbitration agreements face new restrictions as Assembly Bill 2155 closes a critical loophole between federal and state arbitration laws. The legislation aligns the California Arbitration Act with Federal Arbitration Act exclusions, fundamentally changing enforcement strategies for workplace disputes. Employers must reassess their arbitration agreements before January 1, 2027, when existing backstop protections disappear.

United StatesEmployment and HR
Anthony Oncidi
Anthony Oncidi
Jonathan Slowik
Jonathan Slowik
Dixie Morrison
Dixie Morrison
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You might think that California employers who seek nothing more than enforcement of a perfectly reasonable arbitration agreement might finally be able to stop looking over their shoulders, but that is simply not going to happen anytime soon. It seems that with each new legislative session, Sacramento comes up with yet another scheme to limit employers’ right to arbitrate employee disputes.

As experienced practitioners may know, there is some daylight between the two principal arbitration statutes governing workforces in California: the Federal Arbitration Act (“FAA”) and the California Arbitration Act (“CAA”). In particular, the FAA exempts contracts involving workers engaged in foreign or interstate commerce as well as those alleging sexual harassment or sexual assault.

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