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CALIFORNIA EMPLOYERS CAN STILL REQUIRE NEW HIRES TO ENTER INTO MANDATORY BINDING ARBITRATION AGREEMENTS.

On October 15, 2015, Governor Jerry Brown vetoed a proposed bill (AB 465) that would have made it unlawful for any person to require another person to waive their legal right to seek litigation as a stipulation of their employment. Upholding the legality of mandatory arbitration agreements means that employers can continue to require new hires to enter into mandatory binding arbitration to resolve any disputes that may arise during the course of their employment.

However, employers should still be aware that their arbitration agreements must comply with California’s arbitration agreement standards:

  • Agreement must require a neutral fact finder
  • Adequate discovery must be allowed
  • The employer must bear the costs of the arbitration process

Employers that do not wish to impose mandatory arbitration agreements as condition of hire can revise their employment terms to make it a voluntary option.

If you have any questions about your obligations as an employer, please contact us at info@mitzelgroup.com or reach out to your Mitzel Group, LLP attorney directly.