SB 1241 ensures California law governs arbitration proceedings on employment contracts
Sacramento – The state Legislature today approved a major arbitration bill by Senator Bob Wieckowski (D-Fremont) to protect California workers from two of the worst kinds of provisions found buried in arbitration clauses. The bill now awaits the Governor’s signature.
SB 1241 targets both choice of venue provisions that require a worker to arbitrate in a different state and choice of law provisions that intentionally pick a different state’s law to control the arbitration. This allows the companies to circumvent California law in order to disadvantage California workers.
“Companies that employ Californians should not be allowed to force their employees to pay out of their own pocket to fly across country to seek a resolution to their dispute,” said Wieckowski, a member of the Senate’s Judiciary Committee. “By making justice too expensive to attain, companies are able to get away with illegal practices. The same is true of choice of law clauses that allow a corporation to disadvantage an employee by choosing a state with weaker worker protection laws than California’s. By removing the chilling effects these clauses have on California employees, we are tipping the scale a little more toward justice in these forced arbitration proceedings.”
Workers are increasingly forced to sign binding arbitration contracts just to get a job. The contracts often limit or deny the worker’s day in court or prohibit their ability to join a class-action lawsuit. The agreements are buried in pages of text. The clauses give large companies an unfair competitive advantage over California small businesses.
“Small businesses and most workers lack the resources to travel across the country to deal with an employment claim in another state or country,” said Scott Hauge, president of Small Business California. “This is especially true for lower income and disabled employees. These workers may find that other jurisdictions that will be deciding the fate of their dispute could offer fewer protections than under California law. That’s why we are grateful to Senator Wieckowski for carrying this important bill for small businesses and employees in California.”
As SB 1241 moved through the Legislature, Tara Zoumer told committees about her experience when her California employer set up a conference room, brought employees in to sign a stack of papers, including a binding arbitration clause.
Zoumer was fired for refusing to sign and when she filed a wrongful termination suit against her employer in San Francisco Superior Court, she was told she must contest her case through arbitration in New York City.
SB 1241 is supported by the California Employment Lawyers Association, the Consumer Attorneys of California, the California Dispute Resolution Council, the Consumer Federation, Small Business California, the California Democratic Party and several labor unions.
Senator Wieckowski represents the 10th District, which includes southern Alameda County and northeast Santa Clara County.