On February 7, 2020, Chief U.S. District Judge Kimberly Mueller of the Eastern District of California issued a detailed order explaining the court’s January 31, 2020 grant of a preliminary injunction enjoining the State of California from enforcing AB 51.

As we explained in previous coverage, AB 51 was scheduled to go into effect on January 1, 2020, and would have prohibited mandatory workplace arbitration agreements. Under AB 51, employers may not, “as a condition of employment, continued employment, or the receipt of any employment-related benefit, require an applicant or employee to waive any right, forum, or procedure” for Fair Employment and Housing Act (“FEHA”) and Labor Code claims. Violations of the new statute carry hefty consequences, including criminal penalties. READ MORE →

On Friday, January 10, 2020, Chief United States District Judge Kimberly Mueller of the Eastern District of California heard oral argument on plaintiffs’ motion for preliminary injunction.  As a result of clarifications made at the oral argument, the temporary restraining order (TRO) has been modified from its broad applicability to only enjoin defendants from enforcing AB 51 to the extent it applies to arbitration agreements covered by the FAA.  The revised TRO will remain in effect until January 31, 2020, at which point we might have a ruling on the preliminary injunction.  Judge Mueller concluded the oral argument by providing both parties the opportunity to submit supplemental briefing on two issues:  (1)  jurisdiction/standing; and (2)  severability.  As to the latter issue, Judge Mueller indicated she would accept specific proposals related to how the arbitration-related sections of the statute might be severed if she decided to grant the injunction on FAA preemption grounds. READ MORE →