In a surprising, last minute move, Governor Jerry Brown vetoed a bill passed by the California legislature that would have prohibited employers from requiring employees to sign arbitration agreements as part of their employment contracts. The bill is just one of many recent attempts the state of California has made to stand up to federal laws and rules that harm consumers.
The Supreme Court Ruled First
This year, the Supreme Court ruled in Epic Systems Corp. v. Lewis that arbitration agreements are enforceable in employment contracts. Those who oppose this ruling argue that it is an assault on workers’ union rights and that requiring disputes between an employee and an employer be settled in individual arbitration puts an unfair burden on the employee.
Individual arbitration agreements require any and all disputes an employee may have with his employer to be settled individually in arbitration. This harms employees and benefits companies by ensuring that all such disputes are kept from the public eye while making it easier for companies to successfully defend these claims.
Should an employee have a wage dispute with Amazon, for example, an arbitration agreement would prevent his or her coworkers from banding together to fight for their cause. Those who oppose these arbitration agreements argue that the agreements violate workers’ rights under the National Labor Relations Act (NLRA), which states:
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.
The Supreme Court ruled, however, that the Federal Arbitration Act (FAA), an act passed by Congress in 1925, allows for individual arbitration agreements and that the NLRA does not usurp its authority.
Proponents of arbitration agreements argue that arbitration is a cheaper, quicker way to resolve issues in the workplace. Opponents argue that arbitration is cheaper for the employer and prevents employees from banding together to fight for their rights would only allow employers to invoke workplace practices that the NLRA was specifically designed to prevent.
Governor Brown’s Standpoint
Governor’s Brown decision to veto the bill was surprising to many because the state of California has made several attempts to shield its residents from recent federal-level rules and regulations. California has challenged the Federal Government by passing its own laws regarding net neutrality, environmental protections, and immigration laws, just to name a few.
