Time to Revisit Your Arbitration Agreement: Courts Issue Significant Decisions Regarding Arbitration Agreements

In a significant decision for employers, in January 2024 a federal court in the case of Chamber of Commerce of the USA et al. v. Becerra, et. al. issued a permanent injunction barring California from enforcing Assembly Bill 51 which forbid employers from requiring arbitration agreements as a condition of employment.  The recent decision ends a recent period of time of uncertainty as the case went through the appeals courts, and only voluntary arbitration agreements could be entered into with employees. Based upon the decision, California employers should consider requiring employees to enter into arbitration agreements as a condition of employment.  

In a separate California Court of Appeal decision, Hasty v. American Automobile Association of Northern California, Nevada & Utah, the court found an employer’s arbitration agreement unenforceable because it contained language that was overly broad and incorrectly limited the enforcement of certain rights (PAGA and rights to remedies related to government agency claims). The decision also found that the use of electronic signatures through a third-party website (Docusign) and complications related thereto to be problematic. The decision emphasizes the importance of having an arbitration agreement reviewed by counsel and ensure that the distribution of the arbitration agreement is done in a legally appropriate manner.

February 14: Deadline to Notify Current and Former Employees that Non Compete Agreements are Void

By February 14, all employers who entered into a non-competition agreement with current employees and any former employees who were employed from January 2022 to the present, that the non-compete is void. Click here for our recent post discussing California’s new law prohibiting non-competition agreements.  Note that the required notification can and should still confirm that the company will take necessary action to protect misuse of its trade secrets and confidential information of the company and clients. 

Reminder! Update Employee Handbook To Comply With New Employment Laws For 2024

In a recent article we highlighted new employment laws in 2024, which include increased paid sick leave and reproductive loss leave.  Click here to read the article. If you have not already done so, be sure to update your policies and handbooks to be in compliance with the new laws. 

We can help you with questions about arbitration agreements, how to handle non-compete announcements or updating and/or creating your company’s employee handbook and policies. Contact Scott Liner at [email protected] or set up a consultation with Chase Law Group today by calling 310-545-7700.

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_{Please note that this article is for informational purposes only and should not be considered as legal advice or an attorney-client relationship. It is recommended to consult with an attorney for specific legal guidance pertaining to your business and its practices.}