Written by Gordon Webster, Jr.
The last thing any small business owner wants or needs is to be dragged into litigation.
So that’s why the California Chamber of Commerce is urging the state Senate to quash a bill that would essentially ban settlement and arbitration agreements for labor and employment claims.
AB 3080, authored by Assemblymember Lorena Gonzalez Fletcher (D-San Diego), has been tagged as a “job killer” by the CalChamber because it will generate more litigation, delays in resolving disputes and ultimately higher costs for both employers and employees.
The bill would prohibit employers from requiring applicants and employees from waiving their right to pursue action in court as a condition of employment. That means any disagreement would have to be tried by a judge or in front of a jury, creating significant, costly delays and taxing an already overburdened court system.
It goes further to create criminal, misdemeanor liability for employers that violate AB 3080 provisions, in addition to civil liability.
And here’s the kicker: AB 3080 is likely pre-empted by federal law. In this case, it’s the Federal Arbitration Act. In fact, a similar bill signed into law in 2014, AB 2617, has already been preempted by California’s Second District Court of Appeal.
Studies generally demonstrate that employees generally win the same percentage of cases in arbitration, if not more, according to the Calchamber. But outside of arbitration, trial attorneys may not recover as much in fees. So it seems like the trial attorneys may ultimately benefit from this law.
Be sure to reach out to your state Senator today to oppose AB 3080, which will only create higher costs and greater headaches. Aug. 31 is the last day for each state house to pass bills.