Proposed mandatory arbitration ban OK’d

State senators approve #MeToo related bill; if signed into law, could face conflict with SCOTUS

A #MeToo-driven bill that would ban California employers from requiring workers to sign arbitration agreements forcing them to negotiate with companies over mistreatment rather than haul them into court has taken its last step before hitting the governor’s desk for a signature or veto.

State senators voted Wednesday to approve AB 3080, a mandatory-arbitration ban that grew out of #MeToo-movement controversy over workplace sexual harassment and discrimination. If it becomes law, the prohibition would be more broadly applied to cover any claims of employment discrimination, or wage and working-hour claims made under the state Labor Code.

Mandatory-arbitration agreements, highly popular in the corporate world as a means of avoiding costly lawsuits and tarnished corporate and executive reputations, have become a key issue in the #MeToo movement, as they’re seen as a mechanism for covering up sexual harassment and discrimination.

Former Uber engineer Susan Fowler, whose 2017 blog post alleging sexual harassment at the San Francisco ride-hailing firm helped oust the company’s then-CEO Travis Kalanick, has come out in support of AB 3080, calling mandatory arbitration “widespread and sinister.” She had been under an arbitration agreement as a condition of her employment at Uber, but the company has said its employees have been able to opt out of arbitration clauses since 2016, Recode reported.

If Gov. Jerry Brown signs the bill into law, employers would be prohibited from requiring mandatory arbitration as a condition of employment, continuing employment or receiving employment-related benefits.

Companies would also be banned from limiting the ability of employees, job applicants and contractors to share information about sexual

harassment at work.

Brown has until September 30 to sign or veto the bill. In 2015, he vetoed a ban on mandatory arbitration agreements as a condition of employment, following fierce opposition from the state’s Chamber of Commerce, which called such a ban a “job killer,” TechCrunch reported.

If Brown approves the bill, the new law could run into conflict with federal law, according to analysis by the Society for Human Resource Management.

A decision in May by the U.S. Supreme Court upheld the legality of arbitration agreements that include waivers barring employees from ganging up to sue employers in classaction lawsuits, and forcing them to address disputes individually.

The proposed mandatory-arbitration ban “potentially has a lot of hurdles to climb, considering the current status of how these arbitration agreements are viewed in federal court,” lawyer Christina Nordsten told the society.