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California Law Takes Shot at Regulating Arbitration Agreements

Oct. 28, 2019, 10:56 AM

States that try to limit the mandatory arbitration of workplace disputes have been stymied by rulings that say their efforts are preempted by the Federal Arbitration Act, a 1925 law bolstered by a line of U.S. Supreme Court rulings. California has taken a novel approach with a measure finalized this month that may have a chance to survive judicial review where other attempts have failed.

Non-Mandatory Arbitration: Instead of saying workplace arbitration agreements are unenforceable, the California law prohibits companies from requiring that applicants or workers sign arbitration contracts as a condition of employment.

Big Stakes Ahead: California’s law could ...