SACRAMENTO – Gov. Gavin Newsom recently signed labor law Assembly Bill 51 into effect, which could further complicate the legal climate for businesses operating in California.
One expert, however, says that he would be shocked if federal courts do not overturn the bill.
“I don't know if folks are going to wait to challenge it or if they're going to try early on to get declaratory relief with the federal courts,” said Chris Micheli, lawyer with Aprea & Micheli Inc. in Sacramento. “The federal courts have been very clear that any type of limits on the use of arbitration is prohibited.”
Assemblywoman Lorena Gonzalez (D-San Diego) | Assemblywoman Lorena Gonzalez's website
Micheli owned his own lobbying and consulting firm before starting Aprea & Micheli.
The legislation was authored by Assemblywoman Lorena Gonzalez (D-San Diego) who already had a similar bill vetoed by Gov. Jerry Brown. The former governor believed that the bill opposed federal law.or
The new bill will ban employers from requiring arbitration in employment contracts, and, by writing the law into the existing labor code, exposes business owners to criminal liabilities.
“The Fair Employment and Housing Act (FEHA) authorizes the (Department of Fair Employment and Housing) to bring a civil action on behalf of the person who submitted the complaint upon the failure to eliminate an unlawful practice under these provisions,” reads the signed bill.
In addition, FEHA would require the DFEH to issue a right-to-sue notice to a person who submitted the complaint and allow them to take legal action within one year from when the department issued that notice.
The current California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. This bill would “provide that no reimbursement is required by this act for a specified reason.”