Moreover, while the law appears primarily geared towards so-called « mandatory » arbitration agreements, it also prohibits employers from « using an agreement that requires a worker to opt out of a waiver or take positive steps to preserve his rights. » Therefore, the law also applies to employers who request arbitration agreements from their employees, even if this agreement offers the worker the opportunity to opt out of the arbitration agreement at a later date. Prior to AB 51, California courts had found these opt-out provisions to be positive. The Court of Appeal upheld the Court`s decision that the employer waives its right to arbitration. When the Labour Commissioner did not dismiss the complaint, the employer made the decision not to launch a higher judicial petition to force arbitration or interpret the Labour Commissioner`s procedure, the court said. In Garner v. Inter-State Oil Company, an employee filed a class action accusing inter-State Oil of « working in various illegal work practices related to wages, breaks and reimbursement of business expenses. » The employer attempted to impose the worker`s rights on an individual basis – that is, collective claims would be rejected and each worker`s rights would be subject to arbitration. California has once again passed a workers` law, making it increasingly difficult for California employers to enforce binding arbitration agreements, including one that includes class abandonment. Without limited circumstances, AB 51 (adopted earlier this month) prohibits California employers from requiring employees or candidates as a condition of employment to waive their right to assert their rights under the Fair Employment and Housing Act (FEHA) or the California Labor Code. While employers will almost certainly challenge the new law in the coming months, until the dust settles, California employers who are currently using or considering arbitration agreements will have to make important decisions about their arbitration agreements or directives. AB 51 is subject to legal challenge on the basis of the Federal Arbitration Act (« FAA »), which has generally been held by the U.S. Supreme Court to circumvent state laws that disrupt the application of otherwise valid arbitration agreements. Of course, the success of such a challenge is uncertain and it may be years before a final decision is announced.
The accused moved to force arbitration. Based on the six-part trial conducted at the Medical Center of St. Agnes v. PacifiCare of California, 31 Cal.4th 1187 (2003), the Court of Appeals confirmed that the accused waived arbitration on the face of substantial evidence. The defendants waited nearly two years to file their application, « essentially invoked » the trial machine by participating in extensive discoveries, 12 case management hearings, two demurrer towers, and filed a summary application for judgment.