California seeks to bolster employee rights against forced arbitration
Bolstered by the #MeToo movement, the California legislature seeks to expose workplace abuses
Assembly Bill 3080, a bill currently making its way through the state legislature would bar employers from inserting binding arbitration clauses into contracts as a condition of employment. The bill was passed by the California State Assembly on May 31, 2018, but now must make its way through the state Senate before landing on the Governor's desk.
While the discussion originally arose in the name of lifting the veil of secrecy in arbitration on claims of harassment or discrimination, AB 3080 prohibits all arbitration clauses as a condition of employment. Specifically, the bill bars employers from making employees sign arbitration agreements as a condition of employment, continued employment, or receipt of an employment-related benefit, such as a raise or a bonus. The bill also prohibits employers from retaliating against an employee who declines to sign an arbitration agreement that is permissible under the bill.
A 2011 Cornell University study found that employers won almost 80 percent of the time in arbitration, and that employees not only had a lower success rate than in employment litigation, but also got lower damage awards.