Ninth Circuit Panel To Reconsider Decision Upholding California Mandatory Arbitration Ban

The panel of the Ninth Circuit Court of Appeals that largely upheld California's law banning mandatory arbitration agreements in the employment context just withdrew its decision. On August 22, 2022, two of the three judges on the panel decided to withdraw the panel's prior opinion in Chamber of Commerce of the United States of America v. Bonta regarding Labor Code 432.6 which sought to prohibit mandatory arbitration as a condition of employment.

Section 432.6 prevents employers from requiring applicants to sign arbitration agreements "as a condition of employment, continued employment, or the receipt of any employment-related benefit." The law adds criminal and civil sanctions against any employer that retaliated, discriminated, threatened, or discharged an employee who refused to consent to arbitration.