By Brendan Pierson
(Reuters) – A federal appeals court on Wednesday blocked a California law that prohibited employers from requiring their workers to resolve legal disputes in private arbitration.
A three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco in a 2-1 decision held that the law cannot be enforced because it conflicts with a federal arbitration law. The ruling handed a victory to business groups, including the U.S. Chamber of Commerce, which had sued the state.
“We are pleased that the 9th Circuit vindicated the strong federal policy favoring arbitration,” Chamber of Commerce attorney Jennifer Dickey said in a statement.
The office of California Attorney General Rob Bonta, which defended the law, did not immediately respond to a request for comment.
California was the first state to ban mandatory arbitration of all employment-related disputes in the wake of the #MeToo movement.
The 9th Circuit panel in 2021 upheld the law 2-1, but later agreed to reconsider the decision. One of the three judges switched sides for Wednesday’s order, which revived a ruling by a lower court against the law.
(Reporting by Brendan Pierson in New York; editing by Jonathan Oatis)
