Ninth Circuit Rules California Employers Can Condition Employment on Mandatory Arbitration Agreements

In a win for CA employers, on February 15, 2023, the Ninth Circuit issued its opinion regarding California's Assembly Bill 51, legislation which prevented employers from conditioning employment on an employee's acceptance of an arbitration agreement.  

The Ninth Circuit has upheld the District Court's preliminary injunction of AB 51, determining that it conflicted with the Federal Arbitration Act (FAA). As a result, employers can continue to require new employees to execute arbitration agreements as a condition of hire.  

Although the State of California may still apply to reconsider or appeal the decision, it has a low probability of ultimately prevailing, given the Supreme Court's history on this issue. 

Best Practices for UCON Employers 
While the ruling is good news for UCON members and all CA employers, we recommend that you to consult with counsel to ensure that any agreements are carefully drafted and fully enforceable, and to confirm that all of your agreements reflect the most up-to-date guidance from California and Federal courts. It is also best practice to consult with counsel before mandating or invoking an arbitration agreement.  

NOTE: This does not apply to your union employees, as any arbitration procedures are contained in your collective bargaining agreements. 

7 Key Takeaways for Employers: Fisher Phillips

For questions, or for a list of UCON Associates that specialize in employment law, contact UCON at memberinfo@unitedcontractors.org or 925-855-7900.