This blog post is the latest in our running series covering the ongoing battle over Mandatory Arbitration Agreements in Employment.

To recap, On October 10, 2019, California Assembly Bill 51 (“AB 51”) was signed into law, adding Section 432.6 to the California Labor Code. It prohibits California employers from requiring applicants to sign mandatory arbitration agreements as a condition of employment or in exchange for any employment-related benefit. AB 51 also prohibits employers from retaliating against applicants or employees who refuse to sign mandatory arbitration agreements by terminating their employment or taking other retaliatory actions. Under the law, even and an opt out process is still considered a mandatory arbitration agreement. AB 51 does not apply to agreements that have already been signed before January 1, 2020, and only applies to those dated January 1, 2020, or after. Employers who violate the law as drafted could be subject to injunctive relief, lost wages, attorney’s fees, and a violation is considered a misdemeanor under California Labore Code section 433.

AB51’s Ban on Mandatory Arbitration Agreements was immediately challenged in court

In February 2020, Judge Mueller of the Eastern District of California issued a preliminary injunction (as a result of litigation brought by the Chamber of Commerce of the United States and other business groups.  The injunction effectively prevented AB51’s ban on mandatory arbitration from taking effect.  This is where our last article left off.

Between our last article and this article, California appealed……and there was the Covid-19 pandemic.

On September 15, 2021, a three judge Ninth Circuit panel held in a split decision that AB 51 is not fully preempted by the Federal Arbitration Act. In the panel’s decision in U.S. Chamber of Commerce et al. v. Rob Bonta et al., case number 20-15291, Judge Fletcher joined Judge Lucero’s majority opinion which concluded that the Federal Arbitration Act (“FAA”) doesn’t preclude arbitration agreements, but merely requires that arbitration agreements between workers and their employers be entered into voluntarily and consensually. Additionally, the panel ruled that the civil and criminal penalties associated with AB 51 “stand as an obstacle to the purpose of the FAA” and declared those aspects of AB 51 preempted by the FAA — in other words not enforceable.

What happened next? 

On October 20, 2021, the Chamber of Commerce filed a petition for en banc review by the Ninth Circuit. As a result of this petition being granted, the Ninth Circuit panel’s September 15, 2021, decision to vacate the district court’s preliminary injunction is stayed, and therefore AB 51’s ban on mandatory arbitration agreements is still enjoined pending the outcome of future rulings.

On February 14, 2022, the same three judge Ninth Circuit panel announced that the rehearing en banc will be deferred until the U.S. Supreme Court decides relevant issues in Viking River Cruises Inc. v. Moriana. This decision was also split with Judges Lucero and Fletcher making the majority, and Judge Ikuta dissenting.

In Viking, the U.S. Supreme Court will decide whether claims brought under California’s Private Attorneys General Act, which allows workers to sue on behalf of the state of California for labor law violations, can survive federal arbitration requirements. Viking is scheduled for oral arguments on March 30, 2022.

With all this litigation activity at the federal and state level, for the moment, the court’s injunction prohibiting enforcement on AB 51’s ban on mandatory arbitration agreements remains in effect.

Employers with mandatory arbitration provisions in their handbooks should examine their options with the aid of experienced employment counsel.

For additional reading on arbitration agreements, visit Federal Judge Extends Restraining Order Preventing Ban on Employment Arbitration Agreements (AB51) – Adishian Law; California 2020: Employee v. Independent Contractors, Wage and Hour, Arbitration, Discrimination and more – Adishian Law; Arbitration Clauses in Employment Agreements, California Lawyers ( and Legal Update: California 2020 – Adishian Law

Up next in our blog: President Joe Biden signed the “Ending of Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFASASHA).”

This case is focused on the battle regarding employment arbitration agreements in California.

Quoting from the Federal Docket:

“MINUTE ORDER issued by Courtroom Deputy C. Schultz for Chief District Judge Kimberly J. Mueller: On January 10, 2020, the court heard oral argument on plaintiffs’ motion to preliminarily enjoin enforcement of California Assembly Bill 51 (“AB 51”). ECF No. 5. At hearing, the court granted each party opportunity to file a supplemental brief addressing the issues of jurisdiction and severability. See ECF Nos. 37 , 40 . The court also ordered the temporary restraining order previously imposed, ECF No. 24 , remain in effect until January 31, 2020.

Now, having carefully considered all relevant briefing, including supplemental briefing, the court GRANTS plaintiffs’ motion for a preliminary injunction in full. (emphasis added). In the coming days the court will explain its reasoning in a detailed, written order; however, as of this minute order, the following preliminary injunction shall take effect:

1. Defendant Xavier Becerra, in his official capacity as the Attorney General of the State of California, Lilia Garcia Brower, in her official capacity as the Labor Commissioner of the State of California, Julia A. Su, in her official capacity as the Secretary of the California Labor and Workforce Development Agency, and Kevin Kish, in his official capacity as Director of the California Department of Fair Employment and Housing are:

a. Enjoined from enforcing sections 432.6(a), (b), and (c) of the California Labor Code where the alleged “waiver of any right, forum, or procedure” is the entry into an arbitration agreement covered by the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”); and

b. Enjoined from enforcing section 12953 of the California Government Code where the alleged violation of “Section 432.6 of the Labor Code” is entering into an arbitration agreement covered by the FAA.

2. There is no realistic likelihood of harm to defendants from preliminarily enjoining enforcement of AB 51, so no security bond is required. It is so ordered. 

(Text Only Entry) (Schultz, C) (Entered: 01/31/2020) “


At the time of this article, this was the current state of play in the ongoing battle over employment arbitration agreements in California.

So we will wait for the Court’s detailed reasoning regarding employment arbitration agreements. For now though, as of February 3, 2020, AB51 remains unenforceable.

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