Federal Appeals Court Strikes Down California’s Ban on Employer/Employee Mandatory Arbitration Agreements

Yesterday, February 15, 2023, the Ninth Circuit Court of Appeals struck down a California law, AB 51, that prohibited employers from requiring employees to sign an arbitration agreement as a condition of employment or continued employment. The Court ruled that a federal law—known as the Federal Arbitration Act (“FAA”) —preempts AB 51 because AB 51 “stands as an obstacle” to Congress’s “policy of encouraging arbitration.”