If you ever find yourself contemplating legal action against your employer, it is very normal to feel intimidated. Typically, the legal and financial resources of an employer are far greater than that of an employee, which can make many employees who have been the victims of wrongdoing in the workplace apprehensive about taking action against their employer. This imbalance of power is often not just something that is perceived by employees, but a true reality for employees without the counsel of an experienced employment lawyer..
Recently, the U.S. Court of Appeals for the Ninth Circuit struck down a 2019 California law, AB 51, that prohibited employers from requiring employees to agree to arbitration in the event of an employment-related legal dispute. In response to this holding, many California employees are concerned that the decision will exacerbate the imbalance of power between employers and employees.
AB 51, which went into effect in 2020, prohibited California employers from requiring that an employee sign an arbitration agreement in order to be hired, to keep their job, or to receive any kind of employment-related benefit. Under the law, employers who violated these limitations were subject to criminal and civil penalties.
The 9th Circuit Court found that the California state law was in conflict with the Federal Arbitration Act (FAA) and that the federal law preempts the California law. Similar laws passed in Washington state, New York, and New Jersey have also been struck down by courts on the basis of federal preemption.
While this holding may be cause for celebration among employers around California, California employees are left wondering just how much more difficult an employment lawsuit in California will now be and what their legal options are in the event of a legal dispute with their employer.
What is Arbitration?
Arbitration is a form of alternative dispute resolution that seeks to have the parties involved in a legal conflict resolve the matter outside of the court system, to reduce the burden on the courts and promote increased efficiency in resolution, saving time and money.
While arbitration can in many cases be very beneficial for both or all parties involved, it can also favor an employer in some key ways and, therefore, put an employee, who is typically in a weaker position than the employer in terms of resources and access to legal counsel, at an increased disadvantage.
Arbitration agreements between employers and employees may take the form of a stand-alone agreement or an arbitration clause may be contained within an employment contract. After an employee agrees to such terms, they will be unable to file a lawsuit in court for breach of an employment contract, discrimination, wrongful termination, or any other employment-related claim against their employer, with a few exceptions.
Do I have to sign an arbitration agreement with my employer? What are my options?
If you are a California employee and your employer or prospective employer is requiring you to sign an arbitration agreement as a condition of employment, you must be aware that the 9th Circuit Court’s recent decision to strike down AB51 allows them to do so. You have the right to refuse to sign the agreement and, if that results in a loss of employment opportunity with that employer, seek employment elsewhere.
However, even if you choose to sign the arbitration agreement, that decision does not mean that your legal position is weaker. If a legal dispute arises related to your employment and you are, as a result of the arbitration agreement, required to resolve the matter through arbitration, you have the right to be represented in the arbitration process by a lawyer of your choice.
It is critical to note that an arbitration agreement with your employer cannot prohibit you from filing a complaint of workplace discrimination of any kind with the Equal Employment Opportunity Commission (EEOC) and, because the EEOC is not a party to your arbitration agreement, they can bring a case against your employer in court.
Furthermore, the FAA (the federal law concerning arbitration agreements that preempted AB 51) was amended in recent years to include a carve out for all sexual assault and harassment claims. As a result, even if an employee has signed an otherwise enforceable arbitration agreement with their employer, they are still permitted to bypass the arbitration process and bring a lawsuit in the court system against their employer for any claims relating to sexual assault or harassment in the workplace.
An Employee Advocate You Can Trust
Navigating the legal system at any time can be daunting and challenging, especially when you are contemplating a claim against your employer and even more so in a time of changing state employment laws. If you are an employee who has experienced wrongdoing by your employer, in the form of discrimination, wrongful termination, or otherwise, we encourage you to seek legal advice and representation from the experienced employment law attorneys at SANFORD A. KASSEL, a Professional Law Corporation. Our lawyers stay updated on the most recent changes in the law. You can rely on our extensive experience to help you understand and protect your rights. Schedule a free and confidential consultation with a skilled Bay Area Employment lawyer today.
