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U.S. Ninth Circuit Court of Appeals Upholds AB 51 Barring Arbitration Provisions in Employment Contracts  

by James Azadian, Cory Webster, Laura Worsinger, Allison Scott

Published: September, 2021

Submission: September, 2021

 



Today, the Ninth Circuit upheld California’s new law (AB 51) barring arbitration provisions in employment contracts.The U.S. Chamber of Commerce and other organizations challenged the law in federal court. The district court enjoined the law, ruling that it conflicts with the Federal Arbitration Act.


A divided Ninth Circuit panel reversed. Judge Lucero, a Tenth Circuit judge sitting by designation, wrote the majority opinion (joined by Judge Fletcher). Judge Ikuta dissented.


Once the court’s mandate issues, the district court’s injunction will dissolve. The mandate will issue in about 21 days, unless a party files a petition for rehearing or asks for a stay of the mandate pending the filing of a petition for writ of certiorari to the Supreme Court.


Whatever option the plaintiffs pursue, it’s unlikely that the 3-judge Ninth Circuit panel will have the last word.


If the decision stands, businesses with employees in California will need to take a close look at their employment policies and standard contracts to ensure compliance with AB 51.


For more information about this decision and AB 51, please contact James Azadian ( [email protected], or 213-457-1779), Cory Webster ( [email protected], or 213-457-1745), Laura Worsinger ( [email protected] or 213-457-1744), Allison Scott ( [email protected] or 213-457-1728), or your Dykema relationship attorney.


 


 


 


 


As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2021 Dykema Gossett PLLC.


 


 

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