On January 31, 2020, U.S. District Judge Kimberly Mueller issued a preliminary injunction against the controversial new California law (AB 51) which forbids California employers from requiring employees to enter into an arbitration agreement as a condition of employment. As a result of Judge Kimberly Mueller's preliminary injunction, AB 51 will
go into effect until the conclusion of litigation, meaning that employers may continue to require employees to sign arbitration agreements as a condition of new or continued employment
As we previously reported,
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Judge Kimberly Mueller granted a temporary restraining order against AB 51 on December 30, 2019. The temporary restraining order prevented the implementation of AB 51 until a decision was reached regarding the preliminary injunction. The preliminary injunction hearing took place on January 10, 2020 and the law's challengers prevailed twenty-one days later when the preliminary injunction was granted.
AB 51's opponents are challenging the law on the grounds that it is preempted by the Federal Arbitration Act. The preliminary injunction serves to preserve the status quo – i.e. prevent enforcement of AB 51 – until a final judgment is reached. Thus, AB 51 will not go into effect until the litigation regarding the preemptive effect of the Federal Arbitration Act is concluded.
While there is still further litigation ahead, this is yet another positive development for California employers. Visit our previous issue of Compliance Matters for further background information on
If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at 818-508-3700 or visit us online at
Richard S. Rosenberg
Katherine A. Hren
Ballard Rosenberg Golper & Savitt, LLP