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California Governor Vetoes Bill Prohibiting Mandatory Arbitration Provisions in Employment Contracts

By Sherry L. Swieca, Samia M. Kirmani and Abraham N. Saiger
  • October 1, 2018

In a last-minute action on the September 30 legislative deadline, California’s Governor vetoed a bill that, among other things, would have imposed restrictions on the use of arbitration agreements for certain employment claims.

Under vetoed Assembly Bill 3080, beginning on January 1, 2019, employers in California would have been barred from requiring employees and independent contractors to sign arbitration or nondisclosure agreements as a condition of their employment (or continued employment). The bill also would have prohibited employers from retaliating against employees who refuse to sign such agreements.

In his September 30, 2018, statement vetoing the bill, Governor Jerry Brown explained that Assembly Bill 3080 violated the Federal Arbitration Act and recent U.S. Supreme Court decisions by creating impermissible restrictions on the initial formation of arbitration agreements.

The California Legislature originally may have been motivated by the #MeToo movement confronting issues of sexual harassment in the workplace. Unlike similar #MeToo efforts in the states of Maryland, New York, Vermont, and Washington, Assembly Bill 3080 was much broader in scope and appeared to directly challenge the U.S. Supreme Court decision in Epic Systems Corp. v. Lewis, No. 16-285, 584 U.S. __ (2018). For more on the Supreme Court decision, see our article, Supreme Court: Class Action Waivers in Employment Arbitration Agreements Do Not Violate Federal Labor Law.

Jackson Lewis attorneys are monitoring California legislation, and how the Assembly will react to the Governor’s veto. Jackson Lewis attorneys are available to assist employers with this and other workplace issues.

©2018 Jackson Lewis P.C. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis.

This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.

Jackson Lewis P.C. represents management exclusively in workplace law and related litigation. Our attorneys are available to assist employers in their compliance efforts and to represent employers in matters before state and federal courts and administrative agencies. For more information, please contact the attorney(s) listed or the Jackson Lewis attorney with whom you regularly work.

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