The ban on mandatory arbitration is overridden by Federal Arbitration Act.
The Circuit Court of Appeals in San Francisco recently blocked California’s law banning mandatory arbitration, saying that the federal law requiring mandatory arbitration overrides the measure.
Mandatory arbitration is a law that applies to disputes in the workplace between employers and employees, requiring them to bring their internal conflicts to a private arbitrator rather than to a court. However, critics of mandatory arbitration say that this leads to many conflicts being swept under the rug with no recourse, especially with regard to sexual harassment and assault claims.
California originally introduced the ban on mandatory arbitration in 2020 in the wake of the #MeToo movement. The move was challenged by the U.S. Chamber of Commerce, the largest lobbying group in the U.S. and the largest business lobbying group in the world.
The court panel voted in favor of the Chamber of Commerce, saying that the California law showed “hostility towards arbitration that the FAA (Federal Arbitration Act) was enacted to overcome.”
As the Lord Leads, Pray with Us…
- For judges in the federal circuit and appellate courts as they hear cases that challenge federal laws.
- For the governing officials of the states as they seek to maintain balance between federal regulations and the needs of their residents.
Sources: Reuters
