New California Labor Laws Do Away With Mandatory Arbitration

Recent changes to California labor laws will make it illegal for companies to mandate out of court arbitration in employment contracts.

California Governor Gavin Newsom recently signed 15 bills into law which will make improvements to the working conditions of employees in the state. Most notably, one bill signed into law will curb mandatory arbitration agreements in employee contracts.

Arbitration agreements are often written into employment contracts to force an employee to settle any disputes with their employer out of court. This means that employees cannot bring a formal lawsuit against their employer nor can they represent other employees in a class action lawsuit.

If these clauses are written into contracts, employers may be able to block any legal action against them by compelling arbitration instead. With the new bill, AB 51, passed in California, employees will now be able to freely bring legal action against their employers for sexual harassment, discrimination, and violation of wage laws.

Under the law, employers are unable to revoke a job offer to retaliate against a current employee if they choose not to sign an arbitration clause. Although the law is not a complete ban on arbitration agreements, it only allows employers to use them in very narrow circumstances.

New California Labor Laws

Several other California labor laws were signed into law by Governor Newsom that will provide additional protections against harassment and discrimination in the workplace.

Bill AB 9, also called the “Stop Harassment and Reporting Extension Act,” will extend the amount of time that employees have to take legal action under California’s Fair Employment and Housing Act (CFEHA). Instead of one year, employees now have three years to bring claims under the law. This new time limit under California state law is six times longer than the amount of time offered under federal protections.

Some new laws will help curb the issue of sexual violence in the workplace. Bills AB 547 and SB 530 create new guidelines that require state agencies’ janitorial employers to undergo new sexual assault and harassment training. The laws also require new trainings that are specific to employees in the construction industry. Sexual assault reporting also received new regulations with bill AB 538, a law that institutes new requirements about medical examinations and reporting guidelines after sexual violence.

Other new laws, such as SB 229 and SB 688, will hold employers to higher consequences if they discriminate or retaliate against employees.

Some of the new California labor laws are industry-specific. For example, AB 1748 provides protections for maternity and paternity leave taken by flight crews and AB 355 changes the way employees of the Orange County Transportation Authority make decisions on labor law complaints.

Overall, the new protections from these labor laws will make it easier for California employees to do their jobs, feel safe in their workplace environments, and seek compensation for harassment, sexual violence, and labor law violations.

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