In the world of employment agreements, one term that has been in the spotlight over the years is arbitration. It is a legal process that calls upon a neutral third party to resolve disputes between two parties outside of court. In California, arbitration agreements are an important topic, particularly in 2020.
The state of California has a long history of pushing against arbitration in employment agreements. The most recent development, however, is the state`s new arbitration agreement law that came into effect on January 1, 2020. It places some restrictions on employers who require arbitration agreements in their contracts.
The new California law requires arbitration agreements to meet certain criteria in order to be considered legal. For instance, they must be “knowing and voluntary” agreements entered into without any coercion or duress. The agreement also needs to include a clear statement that the employee is waiving their right to a jury trial and any rights they may have to bring a lawsuit against their employer. Furthermore, the agreement must be provided in writing and in a language the employee understands.
The new law also requires employers to provide a copy of the arbitration agreement to employees within a reasonable time before asking them to sign it. This can be at the time of hiring or during employment. Employers who fail to comply with these new requirements could find themselves facing penalties and legal action.
The move towards stricter enforcement of arbitration agreements in California is part of a broader trend towards greater protection of employees` rights. With the new California law, employees are ensured that they are entering into arbitration agreements knowingly and voluntarily, and that their rights are being protected.
While arbitration agreements have their advantages, including lower costs and quicker resolution than a trial, they can also lead to unfair outcomes, particularly if the employer has a significant upper hand in bargaining power. This new California law is geared towards ensuring a fairer playing field for all.
In conclusion, the new California arbitration agreement law is a significant development that employees and employers alike should be aware of. Employers need to review their existing arbitration agreements to ensure they comply with the new law, while employees should understand their rights and protections. With the new law in place, it is hoped that arbitration agreements can be entered into in a more transparent and equitable manner.