Wage and Hour Defense Blog

Since the Supreme Court issued its seminal 2018 decision in Epic Systems Corp. v. Lewis, acknowledging that the Federal Arbitration Act (“FAA”) permits the use of arbitration agreements with class action waivers, many employers have implemented arbitration programs for their employees. Those arbitration programs have been aimed, in no small part, at avoiding the class and collective actions that have overwhelmed employers, particularly in California.

In response, California passed AB 51, which prohibits imposing “as a condition of employment, continued employment, or the receipt of any employment-related benefit” the requirement that an individual “waive any right, forum or procedure” available under the California Fair Employment and Housing Act (“FEHA”) and Labor Code.

We recently wrote about a new California law set to go into effect on January 1, 2020 that would outlaw mandatory arbitration agreements with employees.

The new law, known as AB 51, would also prohibit arbitration agreements that would require individuals to take affirmative action to be excluded from arbitration, such as opting out.  The law would also appear to extend to jury waivers and class action waivers. And it would include criminal penalties.

An eleventh-hour court order will keep that statute from being enforced, at least for a few days.

On December 29, 2019, just days before ...

As employers with operations in California had feared, Governor Gavin Newsom has signed AB 51, which effectively outlaws mandatory arbitration agreements with employees – a new version of a bill that prior Governor Jerry Brown had vetoed repeatedly while he was in office.

The bill not only prohibits mandatory arbitration agreements, but it also outlaws arbitration agreements in which employees must take an affirmative action to escape arbitration, such as opting out.

And as the statute is written in broad terms that extend to waivers of statutory “procedures,” it appears to ...

On April 3, 2017, a federal district court in New Jersey rejected the National Labor Relation Board’s (“NLRB”) D.R. Horton and Murphy Oil holdings and upheld employee waivers of class and collective arbitration. In dismissing wage and overtime claims brought by an employee of Chili’s Grill & Bar, District Judge Noel Hillman ruled that such mandatory arbitration agreements do not violate the National Labor Relations Act. Cicero v. Quality Dining, Inc., et al, 1:16-cv-05806 (April 3, 2017).

Judge Hillman noted the issue was pending before the U.S. Supreme Court, and that the ...