Zombie Apocalypse? Another (Unconstitutional?) California Assault On Arbitration

Seyfarth Synopsis. On Thursday, September 5, 2019, the Legislature passed AB 51. This bill would ban mandatory arbitration agreements with respect to claims under the Labor Code and the Fair Employment and Housing Act while simultaneously disclaiming any intent to invalidate any agreement protected by the Federal Arbitration Act. Is this bill California's latest clever—but predictably unsuccessful—effort to discriminate against arbitration agreements, in violation of federal law?

The Peaceful Prelude

Under current law, California employers can insist that employees agree to resolve disputes through a neutral arbitrator instead of a judge and jury, and also waive participation in class actions. Because public policy favors arbitration, courts have rejected wrongful termination claims by employees fired for refusing to sign arbitration agreements. The FAA, meanwhile, declares that states must enforce arbitration agreements to the same extent that they enforce