Elimination of Arbitration Agreements Bill Sent to Governor

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On Wednesday this week, the California Senate passed AB 3080 (Gonzalez Fletcher; D-San Diego) to limit the use of Settlement Agreements and Arbitration Agreements for labor and employment claims. Gonzalez-Fletcher is the same legislator who authored paid sick leave time, which has become a disaster within the agricultural industry.

In an effort to placate the “#Me Too Movement” on the issues of sexual harassment settlements and agreements preventing disclosure of settlements of sexual harassment and retaliation claims, Gonzalez-Fletcher and Senator Hannah Beth Jackson have taken the matter to a new level. Now they want to ban all arbitration agreements that require arbitration of labor and employment claims in the workplace. Not only is AB 3080 preempted under the Federal Arbitration Act (FAA), it will only benefit trial attorneys seeking class action litigation, and prevent employees and employers from seeking quicker and less expensive resolutions to workplace complaints!

In a nutshell, AB 3080 will prohibit any arbitration agreements made as a “condition of employment” for any claims arising under the California Labor Code or the Fair Employment Housing Act and/or including class action waivers. As we all know, both the California Supreme Court, as well as the U.S. Supreme Court, recently approved use of arbitration agreements as a condition of employment which also include class action waivers of employment-related claims.

The likelihood of AB 3080 being struck down by either a California Court of a U.S. District Court is inevitable. By way of example, a similar bill that was enacted and signed into law in 2014 (AB 2617), prohibited as “a condition of entering into a contract for the provisions of goods or services” waiver of a forum for the resolution of claims i.e., an arbitration clause. This law was subsequently struck down in the case of Saheli v. White Memorial Medical Center by the 2nd District Court of Appeal in Los Angeles. The grounds: AB 2617 was preempted under the Federal Arbitration Act! Clearly, these legislators are playing to their political constituents i.e., the #MeToo Movement, while taking a larger shot at the greater employer community by invalidating arbitration agreements as condition of employment. VCAA members are requested to contact the Governor’s office and request that he veto this bill. VCAA has already sent a letter to the Governor’s office and both legislators setting forth its vigorous opposition to AB 3080.

Article Provided by Rob Roy, Ventura County Agricultural Association