AB 51 – ManagEase

APPLIES TO

All Employers with CA Employees

EFFECTIVE

January 31, 2020

QUESTIONS?

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As of January 1, 2020, AB 51 prohibited employers from requiring job applicants and employees to enter into arbitration agreements. However, on December 30, 2019, a federal district court issued a temporary restraining order preventing the state from enforcing the bill while a request for preliminary injunction was reviewed. After extensive legal argument, on January 31, 2020, the court issued a preliminary injunction with respect to arbitration agreements covered by the Federal Arbitration Act (FAA), preventing the bill from going into effect while its legality is resolved in court. On February 10, 2020, the court issued its ruling supporting the preliminary injunction. Employers with arbitration agreements that are not covered by the FAA (e.g., agreements with interstate truckers) are still subject to the terms of AB 51.

The legal community appears to uniformly indicate that this development means that employers subject to the FAA can continue to use mandatory arbitration agreements until further development in the federal court case challenging the bill. However, employers are recommended to consult with legal counsel on the best course of action before determining next steps.

Action Items

Review arbitration agreements with legal counsel in light of the recent development.
Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

APPLIES TO

All Employers with CA Employees

EFFECTIVE

January 1, 2020

QUESTIONS?

Contact HR On-Call

(888) 378-2456

The California Legislature tends to pass the hard-hitting employment law changes at the end of its session. Here are key updates employers should be aware of.

AB 9 | DFEH Claims Extended. Extends the statute of limitations to three years for all claims filed with the Department of Fair Employment and Housing (DFEH), like claims for sexual harassment, harassment, discrimination, and retaliation. Extending the time to file a claim highlights the need for employers to document all claims, investigations, and discipline.
AB 51 | Ban on Mandatory Arbitration. Employers will soon no longer be able to require employees to execute arbitration agreements as a condition of employment. However, it is unclear if agreements subject to the Federal Arbitration Act are exempt. The bill applies to contracts entered into, modified, or extended on or after January 1, 2020. Stay tuned … legal challenges are on the horizon.
AB 749 | No Rehire Agreements. Employers cannot enter into settlement agreements whereby an employee, who has made a claim against the employer, agrees they cannot obtain future employment from the employer. The rule does not apply where the employer made a good faith determination that the employee engaged in sexual harassment or sexual assault.
SB 142 | Lactation Accommodations. Employer obligations for lactation accommodations are expanded to provide nursing individuals with break time “each time such employee has need to express breast milk.” There are also increased requirements for an approved lactation room. Employers must also provide employees with a written lactation accommodation policy.
SB 188 | Hairstyle Protections. SB 188 amended the California Fair Employment and Housing Act (FEHA) to include protections for hairstyles, subject to limited exceptions.
SB 707 | Arbitration Fees. If an employer with an arbitration agreement fails to pay the required fees to initiate an arbitration proceeding within 30 days after the due date, it is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration.

Action Items

Review claims procedures and documentation processes.
Have managers trained on managing employee claims.
Have arbitration agreements reviewed by legal counsel.
Review no hire agreements with legal counsel.
Ensure that appropriate lactation accommodations are or can be made available; otherwise, review with legal counsel to determine whether an undue hardship exemption may apply.
Prepare and distribute lactation accommodation policy.
Have dress code and discrimination policies updated, and hiring practices reviewed.
Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Posts

California: AB 51 Update – Mandatory Arbitration Agreements are Back In?

Get Ready for California Legislative Updates in 2020!