A new California law meant to help employees avoid arbitration got a partial boost from a California court, but nothing is final yet.

The law, signed late in 2019, seeks to protect workers who don’t want to sign employment agreements that force arbitration — as opposed to suing in court — if they end up at odds with their employers. Consumer advocates and others have said mandatory arbitration agreements often yield one-sided solutions, keeping secret employer wrongdoing and blocking employees from the benefits of judicial proceedings. But the U.S. Chamber of Commerce, joined by various other entities and trade associations, has taken issue with Assembly Bill 51. Businesses typically favor private arbitration as quicker and cheaper than litigation.

Indeed, The Washington Post recently reported that arbitration cases shot up 17 percent last year, and employees received money in a mere 1.6 percent of cases. In arbitration, there’s little to no option for appeals.

Here’s what you need to know about the issues involved, and what they mean for you:

Let’s start with AB 51. Basically, California lawmakers wanted to make sure that employees weren’t forced to agree to arbitration as a condition of employment. Also, the law prevents employees from threatening or retaliating against employees who won’t agree to mandatory arbitration. AB 51 gave the state Department of Fair Employment and Housing some teeth to investigate and resolve complaints, including bringing a civil action on behalf of a wronged employee if necessary. Violations would count as unlawful employment practices, subject to criminal penalties, as well.

The U.S. Chamber and others challenged the law, and the U.S. District Court for the Eastern District of California took their side, saying the Federal Arbitration Act governs mandatory arbitration agreements and is greater than any state law. The court issued a preliminary injunction to prevent enforcement of AB 51.

Then, a divided U.S. Court of Appeals for the Ninth Circuit weighed in, ruling 2-1 that there’s a distinction between laws influencing the period before an arbitration agreement happens and an existing agreement. The FAA applies to existing mandatory arbitration agreements, but not to whether they can be required, the court said. Similarly, the circuit court ruled that civil and criminal penalties for employers only can apply to actions before an agreement is made. Consensual arbitration agreements must be executed per FAA requirements.

Now, the U.S. Chamber wants a rehearing en banc, basically trying to overturn the Ninth Circuit ruling. We’re following the ups and downs of this legislation as it moves through the courts. Much is up in the air as enforcement of the law remains in limbo. But you should be aware of your rights. If your employer or a potential one is forcing you to sign a mandatory arbitration agreement as a condition of getting a job, keeping a job, career advancement, or any other benefits, there may be ways to protect yourself. The experienced employment lawyers at Keller Grover offer free consultations to help you understand your rights, protections and options. In more than 25 years litigating fraud and employment cases, we have recovered hundreds of millions of dollars for clients and class members. Contact us for a free consultation.