On December 7, the Ninth Circuit Court of Appeals is scheduled to hear oral argument in a case of particular relevance to employers who use arbitration to resolve disputes with employees. The case, Chamber of Commerce of the U.S. v. Becerra, considers whether states can prevent employers from conditioning an offer of employment or receipt of employment benefits on an employee's agreement to arbitrate (rather than litigate) any future disputes with the company. In 2019, the State of California passed Assembly Bill 51 (AB 51)-a law that would have done just that. But a California federal judge blocked the law before it could go into effect, reasoning that the Federal Arbitration Act's (FAA's) pro-arbitration policy takes precedence over (or "preempts") the state law. The State appealed to the Ninth Circuit.
On Wednesday, November 1, 2017, President Donald Trump signed legislation repealing an anti-arbitration rule that the Consumer Financial Protection Bureau ("CFPB") had promulgated in early July. Repeal of the CFPB rule was welcomed by representatives of the financial services industry.
In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the United States Supreme Court ruled that the Federal Arbitration Act preempts state laws that prohibit consumer contracts from disallowing class-wide arbitration. On May 5, 2016, however, the Federal Consumer Financial Protection Bureau (CFPB) proposed a new rule that would restore consumer's rights to bring class action lawsuits against banks and other certain financial firms.