A federal appeals court vacated a court order barring enforcement of a California law that banned mandatory workplace arbitration agreements. A divided panel for the U.S. Court of Appeals for the Ninth Circuit reversed in part a district court judgment finding Assembly Bill 51—which Gov. Gavin Newsom signed into law in October 2019—was preempted by the Federal Arbitration Act. In January 2020, U.S. District Chief Judge Kimberly Mueller of the Eastern District of California granted a preliminary injunction enjoining enforcement of the law to state and national business organizations, including the U.S. Chamber of Commerce and National Retail Federation.
The Ninth Circuit majority vacated the preliminary injunction, finding Mueller erred in deciding that the law regulated the enforcement or validity of arbitration agreements in opposition to the federal arbitration statute.