Arbitration Agreement With Class Action Waiver In Contra Costa
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FAQ
A: Arbitration is a form of alternative dispute resolution in which a neutral third-party (the arbitrator), rather than a judge or a jury, applies the law to the facts of a dispute to resolve the dispute.
In a series of sharply divided opinions, the Supreme Court has interpreted the FAA as making class action waiver provisions in arbitration agreements generally enforceable, even when a plaintiff's claims for damages might be too small to justify the expense of arbitrating on an individual basis.
Even if you don't currently have a dispute with the company, it is a good idea to opt out of the forced arbitration clause to preserve your options. You can always agree later to use an arbitrator to resolve any dispute. Moreover, if you have opted out, you will have more negotiating power if there is a problem.
Arbitration might be the right choice for some cases. Limited discovery rights and costs might be useful when less is at stake. Arbitration might feel less adversarial, which could be an advantage where ongoing relationships are hoped to be preserved. Arbitration lends some confidentiality.
In 2014, the California Supreme Court ruled that class action waivers were permissible under the Federal Arbitration Act (“FAA”), and that the FAA preempted state laws to the contrary.
Background. AB 51 was intended to prohibit employers from requiring individuals to sign, as a condition of employment or employment-related benefits, arbitration agreements concerning disputes arising under the California Fair Employment and Housing Act or Labor Code.
Under California law, an employer can require its employees to agree to arbitration as a term of employment. However, if the agreement has too many unfair or biased conditions, courts may refuse to enforce the arbitration agreement or chop off the unfair terms.
Without a valid arbitration agreement, no arbitration can take place or award can be rendered. In other words, a valid arbitration agreement is the cornerstone of any arbitration proceedings. Townsend, J.M., Drafting Arbitration Clauses: Avoiding the 7 Deadly Sins, Dispute Resolution Journal, 2003, p. 1.
Under California law, you cannot be fired solely for refusing to sign an arbitration agreement. The California Labor Code provides strong protections for employees, ensuring that refusal to sign an arbitration agreement cannot be used as grounds for termination.