Assembly Committee Passes Job Killer Bill

The first job killer bill identified by the California Chamber of Commerce this year passed an Assembly committee this week. AB 51 (Gonzalez; D-San Diego) prohibits arbitration of labor and employment claims as a condition of employment. The bill is virtually identical to 2018 legislation, AB 3080 (Gonzalez; D-San Diego), which was vetoed by Governor Edmund G. Brown Jr. because he recognized that the measure plainly violated federal law. The bill also is similar to AB 465 (R. Hernández; D-West Covina), which was vetoed in 2015. AB 51 is a job killer due to the significant increased costs employers will face as a result of more litigation and the expense of delayed dispute resolutions.

Federal Preemption
In addition, it is well understood that if signed into law, the proposal would be preempted by federal law. Both the California Court of Appeal and the U.S. Supreme Court have specifically held that state legislation trying to ban arbitration agreements is preempted by federal law.

In fact, AB 51’s limitation on the ability to form an arbitration agreement as a condition of employment conflicts with U.S. Supreme Court Justice Elena Kagan’s opinion in Kindred Nursing Centers Ltd. Partnership v. Clark that federal law protects and preempts state law regarding both the formation of arbitration agreements, as well as the enforcement of arbitration agreements.

AB 51 also proposes to add a new private right of action under the Fair Employment and Housing Act (FEHA) and exposes employers to criminal liability for any violation.

Key Vote
AB 51 passed the Assembly Labor and Employment Committee on March 6, 5-1.

Ayes: Bonta (D-Oakland), Carrillo (D-Los Angeles), Gonzalez (D-San Diego), Kalra (D-San Jose), Rivas (D-Arleta).

No: Flora (R-Ripon).

Not voting: Diep (R-Westminster).