New CA Law Makes Arbitration Agreements Illegal in the Workplace

When you have a complaint of discrimination or harassment in the workplace, you want to make sure your company addresses and corrects it. But many California businesses have tried to prevent you from taking any issues with the company to court.

An arbitration agreement in your employee contract waives your right to file a lawsuit against your employer for violations against workers’ rights. But a new bill signed into law will now prevent arbitration agreements in California.

Arbitration Denies Workers a Lawsuit

An arbitration agreement keeps any dispute or complaint you have about a company out of court. Instead, you must go through the arbitration process. This process is a closed-door meeting with a third party. You and your employer discuss the complaint, and the third party makes a judgment.

There are no judges or juries in arbitration. And the case does not go into public record. Many critics of the process argue that this protects the company more than it protects the worker. Research has also shown that the employee receives less money in an arbitration judgment.

Arbitration Can Keep Illegal Practices Secret

By outlawing arbitration agreements in the workplace, California hopes to prevent employers from hiding illegal discrimination or harassment practices. Arbitration can help a company keep these cases secret. And some worry that companies may not change policies or fire offending employees if the complaint doesn’t go public.

If you have knowledge that your company has violated workers’ rights, you have the right to file a lawsuit. And in California, your company can no longer force you to go through arbitration.