The bill seeks to preclude employers from using mandatory arbitration agreements. Arbitration provides both the employee and employer an alternative forum to resolve any employment related dispute in a timely manner. Additionally, mandatory arbitration agreements help prevent significant litigation costs that employers may incur. Prohibiting the use of mandatory arbitration will increase pressure on the already-overburdened judicial system.
The California Restaurant Association worked closely with a broad-business coalition to oppose the legislation. The coalition countered point-by-point with facts, existing laws, and state and federal courts’ decisions with regard to the assertions of proponents of the ban. The business community offered significant amendments to “fix” the legislation rather than completely gutting mandatory arbitration agreements for employment purposes.
The CRA and the business community coalition will be requesting that the governor veto this legislation as we believe there is value in the arbitration system both for employees and employers and it allows for swift resolution of conflicts without negatively impacting the caseloads of the courts.