Court vs. Arbitration: What is your Best Option?

The Federal Arbitration Act (FAA) was enacted in 1925 and stipulates that arbitration is another private alternative to going to trial. While this method has its benefits, it also has its drawbacks. Arbitration is final, legal and binding, just like a trial, however, it is not public like a trial is and the decision cannot be appealed like a decision in trial, except in very limited circumstances. Arbitration clauses can be found in about almost any contract that one enters and when a party enters one, they waive their fundamental, constitutional rights to a trial by a jury.

Dora Lane explains in California Employers in Limbo Again on Mandatory Arbitration, that when California enacted AB 51 back in 2019, making it unlawful for employers to require an employee to sign a mandatory arbitration clause, many business groups filed a lawsuit against it, claiming it violates the FAA. On September 15, 2021, the United States Court of Appeals for a 3 judge panel from the Ninth Circuit issued a 2-1 opinion that AB 51 is not in violation with the FAA because the FAA only protects consensual arbitral agreements. AB 51 doesn’t apply to agreements entered into or modified before January 1 2020. The suit that the business groups had filed will be sent back down to the district courts and will probably be reviewed again by the full 9^th circuit and possibly by the United States Supreme Court.

AB 51 is definitely something that we should celebrate to ensure that employees and the working class are not forced to waive their constitutional rights to a trial. This is important to every employee concerning a safe and non-hostile work environment and job security, especially in cases of sexual harassment and assault since arbitration is final and confidential.

This means that those enter into arbitration on those cases are not allowed to retry their assaulter, nor is any of that evidence brought to light, since it is not public record like it is in trial. Arbitration makes it easier to sweep any past allegations under the rug and allowing the assaulter to continue their actions with little to no repercussions. Thankfully, AB 51 allows employees and survivors the choice in addressing harassment and hostile work environments and is a step in the right direction to protect everyone.