Should it pass, California Assembly Bill 3080 will prohibit businesses from requiring employees to sign mandatory arbitration or nondisclosure agreements in order to secure jobs and benefits.

Update: This bill was vetoed by Governor Brown.

A new California bill, spurred by the #MeToo movement, is heading to Governor Jerry Brown’s desk.  Should it pass, Assembly Bill 3080 will prohibit businesses from requiring employees to sign mandatory arbitration, waivers or nondisclosure agreements in order to secure jobs and benefits.

The new bill will make it a crime to threaten, discriminate, terminate  or retaliate against workers or independent contractors who won’t sign mandatory arbitration agreements on condition of employment. It also allows the employees to more freely participate in investigations or proceedings regarding unlawful harassment or discrimination.

The Bill passed in the Assembly on May 30, and in the Senate on August 22, adding Sections 432.4 and 432.6 to the Labor Code, relating to employment. Jerry Brown’s deadline to sign or veto the bill is Sept. 30.

Currently, employers can require mandatory arbitration as a condition of employment and benefits, which waives the employee’s right to pursue legal action in court under the California Labor Code or Fair Employment and Housing Act. However, the bill does not completely outlaw arbitration agreements, and it should be noted that federal case law favors enforcement of arbitration agreements.

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