Governor Vetoes AB 465 Banning Mandatory Employment Arbitration

Bill by Asm. Roger Hernandez would have blocked most mandatory arbitration provisions in employment contracts

by Brian Leubitz

When I was 15, I got my first real job. I was a bagging clerk in a grocery store hired just before the Thanksgiving rush. I thought the tips for carrying bags out to the car were amazing. In my first shift, I made just under $5/hour from my employer, and about the same in tips. I was over the moon.

What I wasn’t thinking about was that contract I just signed. I had gone to the nearest employer that would hire a 15-year-old, the grocery store down the street, and filled out their form. After a brief interview, I signed whatever paperwork they gave me and I was on my way to go put some stuffing in a plastic bag. There are few circumstances where one party has a greater power imbalance than an employment contract. I wanted the job, and I probably would have signed anything. (Sorry Kyle Broflovski).

I bring this up because on Sunday, the governor vetoed AB 465, which would have gone a long way towards addressing this imbalance of power:

Assembly Bill 465 would require that any employer enforcing an arbitration agreement would need to prove that the employee knowingly and voluntarily approved the document, and it was not required to get their job. (SacBizJournal)

Now, the Governor did have some good points about the Federal Arbitration Act and the jurisprudence surrounding it in his veto message. It is complicated and there are some attempts in California at leveling the playing field for arbitration. But the Supreme Court has given it a hallowed place. Why? Well, businesses love it, of course.

But the underlying problem remains, businesses have all the power, and choose to insert these clauses for a reason. They have familiarity with the process and can control outcomes more. Maybe AB 465 needs some seasoning and clarity surrounding the jurisprudence, but this protection would be a big benefit for workers.

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