A U.S. appeals court on Wednesday blocked a California law that prohibited employers from requiring their workers to resolve legal disputes in private arbitration, ruling that it conflicts with a federal arbitration statute.
In their lawsuit, the business groups argued that a U.S. law called Federal Arbitration Act, which generally requires the enforcement of arbitration agreements, must override the California law.
Critics of mandatory arbitration have said the process tends to favor employers and can discourage workers from bringing legal claims. But the chamber and other business groups have said it provides a more efficient and cheaper alternative to court proceedings, which benefits both workers and employers.reversed
that ruling, with Judges Carlos Lucero and William Fletcher voting to keep the law in effect while Circuit Judge Sandra Ikuta dissented. The panel, however, subsequently decided to reconsider, and Fletcher switched sides in Wednesday's ruling to block the law. Fletcher did not write an opinion in the case, instead joining Ikuta, who said the California law showed "hostility towards arbitration that the FAA was enacted to overcome."
Reporting by Brendan Pierson in New York; editing by Jonathan Oatis, Will Dunham and Alexia GaramfalviBrendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at [email protected].
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