The California legislature recently submitted a bill (AB 465) to Governor Jerry Brown that deters employers from using arbitration agreements that include a provision requiring the arbitration of claims brought against employers for violations under the California Labor Code.

AB 465 provides that any waiver of rights, penalties, remedies, forums and procedures established by the California Labor Code, including the right to file a claim with the Labor Commissioner or a civil action in court, may not be required as a condition of employment. The bill would also require that any waiver be knowing and voluntary, in writing, and expressly not made as a condition of employment. This added provision will no doubt provide another avenue for employees to challenge the waiver of Berman hearings (administrative hearings before a Deputy Labor Commissioner regarding claims of California Labor Code violations) in arbitration agreements.

Employers who seek to enforce such waivers will bear the burden of proof that they satisfied the requirements of AB 465. Employees often argue that arbitration agreements provided with offers of employment are implied conditions of such employment. Therefore, if the bill is signed into law, employers should include an express provision in their arbitration agreements that states that it is not required for employment. Otherwise, courts will likely deem signed waivers involuntary, unconscionable, against public policy and unenforceable.
Continue Reading California Legislature Pushes to Limit Employer/Employee Arbitration Agreements