California appeals court declines to enforce mandatory arbitration agreement where FAA did not apply
Key points
- On Oct. 22, a California appeals court decided Molina v. Triumph Residential Services
- When the FAA does not apply, California's ban on mandatory employment arbitration can render an agreement unenforceable
- Labor Code section 432.6 (AB 51) bars requiring waivers as a condition of employment; violations are misdemeanors
In Molina v. Triumph Residential Services, decided Oct. 22, a California appeals court held that the state's ban on mandatory employment arbitration can render an agreement unenforceable when the Federal Arbitration Act (FAA) does not apply. Labor Code section 432.6 (AB 51) bars employers from requiring such waivers as a condition of employment; violations are misdemeanors. For reference only, not legal advice.
What employers should do
- Review mandatory arbitration clauses in current employment agreements and assess enforceability where the FAA does not apply
- Confirm agreements comply with California Labor Code section 432.6
Policy details
- Jurisdiction
- California
- Status
- Court ruling
- Effective date
- —
- Employers covered
- California employers requiring employees to sign mandatory arbitration agreements
- Official source
- View official source ↗
Original report: Fisher Phillips LLP ↗Edited with AI assistance. Facts are based on official sources and original reports. For information only; not legal, immigration or insurance advice.