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California Takes Aim at Employee Arbitration

As covered in previous blog posts, arbitration agreements in employment contracts have faced potential upheaval over the past year. Now California looks to make its own mark on the issue.

A new California bill looks to be ready for the Governor's signature and, should it become law, it will drastically alter employees' rights when negotiating contracts with their employers. The bill would limit employers' ability to insert mandatory arbitration clauses in their agreements with their employees, allowing the employee to reject the clause. The bill would also prevent the possibility of the job candidate losing the job offer for declining the provision.

The bill, of course, will not go unchallenged, as some are already calling it an essential ban on arbitration clauses, which if the bill were treated as such, would almost certainly lead to it being struck down in court.

There is also concern that without arbitration an already full court docket could be overloaded with potentially frivolous claims. However, those in favor of the bill argue it gives more protection and power to employees, an issue that can be particularly important for matters like sexual harassment in the workplace.

The upcoming battle over the law could certainly lead to uncertainty as to what employers can require of potential employees in their hiring contract. It is important for employers to a have experienced employment lawyers on their side to navigate the ongoing changes.

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Larson & Gaston, LLP

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