​Lauren Teukolsky’s commentary was featured in a recent Law360 article on the Ninth Circuit’s recent ruling that California’s A.B. 51 is preempted by federal law.  AB 51 prohibited employers from forcing employees to give up their civil rights, such as the right to a jury trial and the right to appeal an adverse decision, as a condition of employment.  The ruling, a reversal of the Ninth Circuit’s own prior decision in 2021, is a significant blow to the state’s workers.

California Governor Gavin Newsom signed A.B. 51 into law in 2019, making it illegal for employers to force individuals to waive their right to bring civil rights cases in court as a condition of employment. Arbitration agreements typically stipulate that all claims made by workers—regardless of their severity—must be resolved under private arbitration, a process that overwhelmingly favors employers, disproportionately harms historically marginalized communities, and shields corporations from public scrutiny and accountability. A.B. 51 was meant to ensure that employees were not coerced into signing away their rights, and that all waivers of these significant rights were voluntary.

Last year, a three judge Ninth Circuit panel voted to revisit a 2021 decision in which it partially reversed an injunction that stopped California from enforcing A.B. 51. Last month, the panel found that the Federal Arbitration Act preempted A.B. 51, nullifying the law in most situations and allowing California’s corporations to once again force workers to sign arbitration agreements waiving their civil rights.

Law360’s article features analysis and advice from management-side and workers- side attorneys on how corporations and workers’ advocates should respond to the Ninth Circuit’s decision. In the article, Ms. Teukolsky advises plaintiffs’ lawyers to be extremely cautious when advising clients on arbitration agreements:

"’Plaintiff-side employment attorneys need to think very carefully before they advise an employee to refuse to sign one of these arbitration agreements,’ Teukolsky said. ‘I think you need to advise them: you may lose your job over this. Is that a risk you're willing to take?’"  Ms. Teukolsky speaks from experience: she filed one of the only cases under A.B. 51 after her client was fired for expressing opposition to signing away her rights.
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To read the article in its entirety, click here. For the Court’s opinion holding that A.B. 51 is preempted, click here.
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If you have concerns about an arbitration agreement your employer has recently asked you to sign, click here to get in touch with our office. 

On Friday, April 8, Teukolsky Law filed a lawsuit in Los Angeles Superior Court on behalf of April Blackwell, a 37-year-old Black woman, against The Pendry West Hollywood, a luxury hotel owned by Montage International on the iconic Sunset Strip. The lawsuit is the first of its kind, alleging that the Pendry terminated Ms. Blackwell because she said she did not want to sign a mandatory arbitration agreement giving up her ability to sue the Pendry for race discrimination and similar claims in a court of law.

Forcing job applicants and employees to sign forced arbitration agreements was recently made illegal in California by Assembly Bill 51 (AB 51). Under forced arbitration agreements, all claims made by workers—regardless of their severity—must be resolved under private arbitration, a process that overwhelmingly favors employers, disproportionately harms historically marginalized communities, and shields corporations from public scrutiny and accountability.  As a condition of employment, The Pendry required Ms. Blackwell to give up her right to access the courts, her right to a jury trial, her right to appeal an erroneous decision, and her right to conduct full discovery to prosecute her claims.  When she refused to give up her rights, the Pendry fired her after just one day of work.

California Governor Gavin Newsom signed AB 51 into law in late 2019 after widespread public outrage over arbitration agreements that hid allegations of sexual harassment and assault against Hollywood producer Harvey Weinstein and other prominent figures. The fate of AB 51 is currently in limbo. In 2021, the Ninth Circuit Court of Appeals upheld AB 51 in Chamber of Commerce of United States v. Bonta, 13 F.4th 766, 771 (9th Cir. 2021) (“Bonta”). However, the Ninth Circuit is deferring a vote on whether to rehear Bonta until after the United States Supreme Court issues a ruling in another arbitration case argued in late March 2022.

Still, even if AB 51 is ultimately struck down, Ms. Blackwell’s claims against the Pendry will survive because California law protects employees who are terminated for expressing opposition to conduct they reasonably believe is unlawful, which is exactly what Ms. Blackwell did.
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To view the complaint, click here.