Arbitration Agreement Retroactive California: What You Need to Know
As of January 2021, a new law went into effect in California regarding arbitration agreements. This law, known as AB 51, prohibits employers from requiring employees to sign arbitration agreements as a condition of employment. This law was met with controversy and even legal challenges, but ultimately was upheld by the Ninth Circuit Court of Appeals in May 2021.
One question that remains for many employers and employees is whether this law applies retroactively. In other words, can employers enforce arbitration agreements that were signed before AB 51 went into effect? The answer is not entirely clear, but there are some important considerations to keep in mind.
First, it`s important to understand that AB 51 does not explicitly state whether it applies retroactively or not. However, the language of the law suggests that it was intended to apply prospectively. For example, the law states that “a person shall not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act or this code…” (emphasis added).
This language suggests that the law was intended to apply to future agreements, not those that were already in place. However, there is some debate among legal experts about whether this language is clear enough to definitively exclude retroactive application.
Another factor to consider is the current legal challenges to AB 51. While the law was upheld by the Ninth Circuit Court of Appeals, there are still pending challenges in state court. If these challenges are successful and AB 51 is struck down, it`s possible that any arbitration agreements signed during the period when the law was in effect could be deemed invalid.
Ultimately, the legality of enforcing arbitration agreements signed before AB 51 went into effect is a gray area. Employers should consult with legal experts to determine the best course of action in their specific situation. It`s also important for employees to understand their rights under AB 51 and to seek legal advice if they feel that their employer is violating the law.
In conclusion, the arbitration agreement retroactive California issue is a complex and evolving topic. While it`s not entirely clear whether AB 51 applies retroactively, it`s important for employers and employees to stay informed and seek legal advice as needed.