With the Supreme Court and this new injunction, California businesses will be able to continue to limit the way employees enforce their rights. Now it is up to the courts and arbitration proceedings to ensure that mandatory arbitration is not a mirage. For an arbitration agreement to be valid, the employer must also grant “compensation” to the employee if the worker gives himself up to waive access to justice. If the worker is a new job, it is likely that job creation will be an adequate counterpart. For contract agents, an extension or extension of the contract would also be sufficient. For current workers who are not covered by a contract, it is not certain that continued employment will be sufficiently taken into account in the agreement. If they give an employee an additional increase, bonus or days off, that would probably meet that requirement. The California Supreme Court stated in Armendariz v. Foundation Health Psychare Services, Inc., that 5 factors must be available for arbitration agreements to be enforced, in addition to contract law requirements. 3 These conditions are as follows: In Ingle v. Circuit City Stores, Inc., a May 2003 decision, the Tribunal distinguished its previous decisions in Ahmed and Najd on the basis that the applicant in Ingle did not have a useful opportunity to rule under the arbitration agreement or a bargaining power of the terms of the contract.
These facts justified the relevance of the procedure. The Court then considered whether the agreement was also “unilateral” in establishing material predictability. On the basis of various conditions contained in the agreement, such as a provision prohibiting arbitrators from hearing claims as class actions and a provision allowing only the employer to amend or terminate the agreement, the court found that the agreement was in fact materially unacceptable and, on that basis, found that the whole agreement was not applicable. On February 7, 2020, the regional court found that AB 51 was doing just that. The Tribunal found that AB 51 , both in its explicit purpose and in its operation, “characterizes the requirement to enter into arbitration agreements and thus subjects such agreements to unequal treatment.” In adopting the order of reference, the Tribunal agreed with trade organizations that AB 51 would “forcefully obstruct the FAA`s objective of “promoting arbitration” by sanctioning the conduct of employers ,”with the formation of legally admissible arbitration agreements.” In particular, the court referred to “civil and criminal penalties related to the violation of the law,” such as the possible detection of a maximum penalty of six months in prison or a fine of up to $1,000 for employers who violate the provisions of the California Labor Code, of which AB 51 would be a member. Legislation allowing penalties against employers for the continuation of arbitration agreements could hardly be said to “promote arbitration,” the court found. The injunction will remain in effect until the matter is resolved. For years, Parliament has supported and encouraged the use of arbitration to resolve disputes.
Indeed, the Federal Arbitration Act was passed in 1925 and California followed in 1927 with its first arbitration status. Since then, California courts and its legislative power have consistently demonstrated a policy that promotes arbitration.