California’s New “Ask For Arbitration - Go To Jail” Law Questioned By Court

Dallas Employment Lawyer

California employment lawyers are closely following what one commentator calls the new “Request Arbitration, Go to Jail” law. From Proskaur’s California Employment Law Update:

[T]he California legislature recently passed and Gov. Newsom signed into law Assembly Bill 51, which would impose criminal penalties upon employers seeking to have their employees sign arbitration agreements – it is in short the “Request Arbitration, Go to Jail” law.  Today, United States District Judge Kimberly J. Mueller granted a temporary restraining order, enjoining the state from enforcing AB 51 until a further evidentiary hearing can take place on January 10, 2020.  As predicted by most observers, the Court found that there were “serious questions regarding whether the challenged statute is preempted by the Federal Arbitration Act.”

The U.S. Chamber of Commerce and other business organizations filed suit in federal court against the State of California to have Assembly Bill 51 declared preempted by the FAA. A U.S. District Court has now enjoined enforcement of the new law until another hearing is held on January 10th. Jackson-Lewis’ California Workplace Law Blog reports:

The court ruled that the U.S. Chamber of Commerce and other business organizations have shown that there are serious questions regarding whether California’s law is preempted by the Federal Arbitration Act (FAA)

Given prior Supreme Court rulings on the preemptive power of the FAA, the likelihood that the new California statute will ever be enforced is, to my mind at least, seriously in question.