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California’s Ban on Mandatory Arbitration Struck Down

Last year, the U.S. Court of Appeals for the Ninth Circuit held that California Labor Code Section 432.6 – which prohibits and criminalizes mandatory arbitration of California Fair Employment and Housing Act (FEHA) and Labor Code claims as a condition of employment or continued employment – is preempted by the Federal Arbitration Act (FAA), and remanded the case to the district court. The district court recently entered a permanent injunction that precludes California employers from enforcing the prohibition on mandatory arbitration; that is, employers can now require employees to arbitrate covered disputes as a condition of employment.