Put that New-Year Resolution on Hold

That’s what a federal court in California said to the state legislature two days before a new employment law was to go into effect.

The new law, Assembly Bill 51, would’ve banned mandatory arbitration agreements with employees. It also would’ve banned agreements that required folks to opt out of arbitration. And it would’ve barred retaliation against those who didn’t opt in. The law would’ve carried criminal penalties and could have applied to other employment agreements like waivers of jury trial or class action. It was set to go effective January 1, 2020.

That is until December 30, when a federal court entered a temporary restraining order that stopped the state from enforcing it. The next step is Friday, January 10, when the court will hold a hearing on whether to keep the temporary order in place until trial. The ultimate question is whether California’s law is preempted by federal law. It’s an issue we’ve touched on here before, and it’s what led the court to put the new law on hold.