SACRAMENTO – With Gov. Gavin Newsom recently signing controversial, anti-arbitration labor law Assembly Bill 51, the future of business in California is uncertain.
While a number of experts have adamantly opposed the bill, predicting that it will be overturned due to a violation of federal law, a study from the trial lawyer group American Association for Justice shows statistics supporting its position which favors consumer complaints going to court over arbitration.
“This groundbreaking research proves the American public has been sold a pack of lies about forced arbitration – it isn’t just as fair as a jury trial, and isn’t faster or cheaper,” AAJ President Bruce Stern said in a press release. “In fact, the brand-new data – provided by the arbitration providers themselves – revealed today show you are more likely to be hit by lightning than win in forced arbitration. The truth is that if you download an app, purchase a cellphone, start a new job, use a rideshare, or admit a parent into a nursing home, you are forced to sign away your right to hold law breaking corporations accountable.”
However, not everyone is sold on the study and its findings and some experts believe it is just part of a much deeper agenda from trial lawyers in an attempt to take down state businesses in court.
“This study by the American Association for Justice is just another attempt by plaintiffs’ lawyers to further their own agenda and discredit the arbitration process,” Kyla Christoffersen-Powell, president and CEO of Civil Justice Association of California, said in a statement. “Employees who resolve their disputes through arbitration are three times more likely to win, be awarded more money and resolve their disputes faster than in court. It’s no surprise a plaintiffs’ lawyers study portrays this process negatively as it prevents them from cashing in on excessive litigation in the courts.”
Authored by Assemblywoman Lorena Gonzalez (D-San Diego), AB 51 bans employers from requiring arbitration in employment contracts, and, by writing the law into the existing labor code, exposes business owners to criminal liabilities. Gonzalez had a similar bill vetoed by then-Gov. Jerry Brown who believed that the bill opposed federal law. Opponents are hoping that the federal courts will rule that the bill is preempted by the Federal Arbitration Act.