Courts grant temporary hold on AB 51

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U.S. District Judge Kimberly J. Muller issued a temporary restraining order on the enforcement of Assembly Bill 51 Monday, pending the court’s resolution of the legal challenge.

The bill, which was signed into law by Gov. Gavin Newsom in October and set to go into effect on Jan. 1, prohibits companies from requiring their employees to sign mandatory arbitration agreements covering any claims under the California Fair Employment and Housing Act and the Labor Code.

The U.S. Chamber of Commerce, with the help of a coalition of businesses and led by the California Chamber of Commerce, filed legal challenge to the bill on Dec. 10 and asked the courts for an injunction.

“We shouldn’t implement a law until it has gone into a judicial review when there’s a viable challenge like this, and the law should be stayed while awaiting a decision by the judge,” Brian Koegle, a partner in the employment and labor law department at Poole Shaffery & Koegle LLP, said in a previous Signal interview.

With the temporary restraining order, the effective date of AB 51, which CalChamber believes to be unconstitutional, will, in fact, be stayed, according to a statement issued by CalChamber on Monday.

Muller also set a hearing on the motion for a preliminary injunction for 10 a.m. on Jan. 10.

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