Q: CA company asks existing employee to sign a mandatory arbitration agreement. If the employee refuse can they fire him?
CALIFORNIA LABOR CODE SECTION 432.6
(a) A person shall not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code) or this code, including the right to file and pursue a civil action or a complaint with, or otherwise notify, any state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity of any alleged violation.
(b) An employer shall not threaten, retaliate or discriminate against, or terminate any applicant for employment or any employee because of the refusal to consent to the waiver of any right, forum, or procedure for a violation of the California Fair Employment and Housing Act or this code, including the right to file and pursue a civil action or a complaint with, or otherwise notify, any state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity of any alleged violation.
(c) For purposes of this section, an agreement that requires an employee to opt out of a waiver or take any affirmative action in order to preserve their rights is deemed a condition of employment.
(d) In addition to injunctive relief and any other remedies available, a court may award a prevailing plaintiff enforcing their rights under this section reasonable attorney’s fees.
(e) This section does not apply to a person registered with a self-regulatory organization as defined by the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78c) or regulations adopted under that act pertaining to any requirement of a self-regulatory organization that a person arbitrate disputes that arise between the person and their employer or any other person as specified by the rules of the self-regulatory organization.
(f) Nothing in this section is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act (9 U.S.C. Sec. 1 et seq.).
(g) This section does not apply to postdispute settlement agreements or negotiated severance agreements.
(h) This section applies to contracts for employment entered into, modified, or extended on or after January 1, 2020.
(i) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
Yes, at this point in time, you can be fired for refusing to agree to a new arbitration provision.
The California legislature passed a law that made arbitration clauses as a condition of employment unlawful. However, just after it became effective, a federal court enjoined enforcement of that law until a challenge about it is concluded. That injunction still is in effect as the court has not yet resolved the issues related to federal preemption. As such the old state of the law still controls, and under that law, your employer has the right to impose mandatory arbitration on any applicant or employee.
Good luck to you.
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