Contact Us for a Free Initial Consultation 888-500-8469

California Legal News

California Anti-Arbitration Bill Approved by Legislature

Posted by Eric Kingsley | Sep 02, 2015 | 0 Comments

Approved by the Legislature on August 27, 2015, AB 465 would prohibit California employers from requiring most individuals to enter into arbitration agreements as a condition of their employment

Arbitration agreement 300x211

According to the bill's sponsor, the goal of AB 465 is to protect workers from being coerced into signing contracts to waive the right to take labor violations to the Labor Commissioner or to court and submit all claims to the employer's arbitrator. Accordingly, the bill is designed to ensure that waivers of important employment rights and procedures arising under California law are made voluntarily and with the consent of the employee.

If enacted, the bill would make such waivers, including, presumably, class action waivers that were expressly sanctioned by Concepcion, “involuntary, unconscionable, against public policy, and unenforceable” if made a condition of employment. The bill also would make it unlawful to threaten, retaliate, or discriminate against any person who refuses to sign such a waiver.

Background

For years, California employees have primarily relied on the doctrine of unconscionability to argue against the enforceability of arbitration agreements. This argument typically requires two things:

  1. A showing that the agreement is procedurally unconscionable, meaning that there was some unfairness in the procedure or method in which the agreement was presented to the employee;
  2. A showing that the agreement was substantively unconscionable, meaning that its terms were overly harsh or one-sided.

AB 465 provides that arbitration agreements, and other waivers of legal rights, must be “knowing and voluntary and in writing, and expressly not made as a condition of employment.” This would represent a shift in California law as it would allow employees to invalidate arbitration agreements without a showing of both procedural and substantive unconscionability. In addition to this change, AB 465 makes several other changes, including

  1. Placing the burden of proving that an arbitration agreement was proper on the employer,
  2. Making arbitration agreements required as a condition of employment per se invalid, and
  3. Providing employees who are successful in invalidating these types of agreements the right to recover their attorneys' fees.

AB 465 was approved by the California Senate on August 24 and approved by the full California Assembly on August 27, 2015. With its passage, the bill now goes to Governor Brown for his signature.

California Employment Law

Should AB 465 become California law, employers should be prepared to make sure that agreements to submit claims to arbitration are voluntary on their face and as a practical matter. If Governor Brown chooses not to sign the measure, employers should still make sure that their arbitration agreements are in compliance with the current state of California law.

An experienced California employment lawyer can quickly answer your questions about arbitration agreements and your rights as an employee in California. To discuss a potential claim on your behalf, feel free to contact leading California employment lawyers at Kingsley & Kingsley. Call toll-free at (888) 500-8469 or click here to contact us via email.

About the Author

Eric Kingsley

In practice since 1996, attorney and firm co-founder Eric B. Kingsley has litigated complex cases and authored numerous appellate briefs in both state and federal court on behalf of the California law firm of Kingsley & Kingsley, including over 150 class actions. Mr. Kingsley concentrates his pra...

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Contact Us For A Free Initial Consultation

At Kingsley & Kingsley, we understand that you may be going through a difficult time, and we are here to help you recover from the wrongs that you suffered. An attorney at our Los Angeles law firm can meet with you for a free initial consultation to discuss your circumstances. We also take most cases on a contingency fee basis, which means that you do not pay any fees unless you win or recover compensation.

Menu