California Mandatory Employee Arbitration Agreement Bill Rejected by Governor

A bill that would have outlawed California mandatory workplace arbitration agreements was vetoed by Governor Jerry Brown, who signed a number of #metoo -inspired laws but soundly rejected this one. Sponsored by Assemblywoman Lorena Gonzalez, D-San Diego,  AB 3080 would have barred companies from mandating employees sign arbitration agreements – forgoing their right to judicial remedy in the event of a dispute – as a required condition of employment. Riverside sexual harassment lawyers at The Nassiri Law Group were skeptical of the bill’s chances, particularly given that Brown had vetoed a similar measure three years ago. California employer arbitration lawyer

Although supporters of the measure aren’t wrong in noting that forced workplace arbitration agreements effectively silence workers who are legitimately victimized while shielding harassers and abusers, the unfortunate reality is that both the California Supreme Court and the U.S. Supreme Court have time and again ruled that employers can lawfully require employees to sign arbitration agreements in which they waive the right to take a claim for sexual harassment or other employee rights issue before a judge and jury.

The U.S. Supreme Court Bolstered Employer Protections Precluding AB 3080

One of the most recent of those cases weighed by the U.S. Supreme Court was Epic Systems Corp. v. Lewis, decided in May. The court was asked to interpret two federal laws – the National Labor Relations Act of 1935 and the Federal Arbitration Act in 1925. Specifically, the latter contains a provision stating that any contract (employment or otherwise) that contains a provision requiring arbitration instead of litigation to resolve disputes is to be considered valid and enforceable unless there are legal or equity grounds on which to deem the contract invalid. The NLRA meanwhile allows workers the right to self-organize, form, join or assist in organized labor and to engage in collective bargaining.

So the question was whether a no-group arbitration clause, in violating portions of the NLRA, provides for legal grounds to prohibit employer-imposed mandatory arbitration agreements. 

The 5-4 ruling swung in the favor of the court’s conservative majority, narrowing employee protections – with seemingly partisan disregard for the whole purpose of the NRLA, which was passed as a means to counter the disparity in bargaining power between employees and employers.

Riverside sexual harassment attorneys know full well no such language exists in the FAA, the careful reading of a history of which seems most likely adopted as a means to best settle disputes among merchants (i.e., those who have comparable bargaining power, unlike employer/ employee disputes). It’s sponsors specifically indicated it wasn’t to be applied to employment of any workers engaged in foreign or interstate commerce, and those who sponsored it agreed aloud it wasn’t specifically intended to cover labor agreements. Nonetheless, here we are – primarily thanks to series of conservative reinterpretations of this act – going to so far as to conclude there existed a “liberal federal policy” of arbitration agreements in employment.

California Lawmakers Continue to Try Clawing Back Worker Protections

The only means by which to change these provisions are legal challenges, but that requires the state that passes legislation to the contrary to take it up with the U.S. Supreme Court. That requires time and expenses. At this juncture, given that such a challenge – were it to proceed to that level – would go before the same judicial panel that decided Epic Systems Corp. – is unlikely to be fruitful.

Brown did sign a similar measure in 2014. AB 2617 outlawed mandatory arbitration agreements for goods and services, but a federal appeals court in March struck down the law, citing the very same Federal Arbitration Act.

In 2015, Brown was presented with another bill, AB 465, that would have struck down mandatory arbitration in the employment context. However, he voted that, citing the FAA.

Brown did note that courts in California tend to be more employee-friendly than most, with provisions requiring adequate discovery, neutral arbitrator and no cap on remedies or damages. Riverside sexual harassment attorneys know that doesn’t necessarily mean it’s fair to employees, just generally fairer than other states.

Whether your California sexual harassment case can be handled through litigation or must be handled through arbitration, you can and should contact an experienced sexual harassment lawyer to ensure your rights are protected.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.

Additional Resources:

Gov. Jerry Brown’s Veto Memo to California State Assembly on Assembly Bill 3080, Sept. 30, 2018, Office of the Governor

More Blog Entries:

Orange County Employment Attorneys Detail 2019 California Labor Law Round-Up, Nov. 30, 2018, Riverside Sexual Harassment Lawyer Blog

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