Labor Code § 432.6
Limits on mandatory employment arbitration (AB 51)
AB 51 barred employers from forcing arbitration as a condition of employment — but the Ninth Circuit held it preempted by the Federal Arbitration Act for covered agreements.
Read the official text at California Legislative Information →
Overview
Labor Code section 432.6, enacted by Assembly Bill 51 in 2019, was the Legislature’s attempt to curb mandatory employment arbitration by prohibiting employers from conditioning employment on an applicant’s or employee’s waiver of the right to litigate FEHA and Labor Code claims. Its real-world force, however, has been largely neutralized by federal preemption.
The statute sits at the center of the long-running tension between California’s skepticism of compelled arbitration and the Federal Arbitration Act’s policy putting arbitration agreements on equal footing with other contracts.
The prohibition
An employer may not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require an applicant or employee to waive any right, forum, or procedure for a violation of the FEHA or the Labor Code — including the right to file and pursue a civil action. The statute also bars threatening, retaliating against, or terminating a person for refusing to consent to such a waiver.
Federal preemption
In Chamber of Commerce of the United States v. Bonta, the Ninth Circuit held that the Federal Arbitration Act preempts section 432.6 as applied to arbitration agreements governed by the FAA, because the statute singles out and disfavors the formation of arbitration agreements. The result is that, for the broad run of FAA-covered agreements, section 432.6 cannot be enforced. (See Chamber of Commerce v. Bonta.)
The Ninth Circuit held section 432.6 FAA-preempted as to arbitration agreements covered by the Federal Arbitration Act (Chamber of Commerce of the United States v. Bonta (9th Cir. 2023) 62 F.4th 473). Practitioners should treat the statute as generally unenforceable against FAA-governed agreements and confirm the current state of the law.
Practice notes
Do not rely on section 432.6 to defeat an FAA-governed arbitration agreement. Where an agreement is outside the FAA’s reach, or where generally applicable contract defenses such as unconscionability apply (Civ. Code § 1670.5), pursue those instead. Track ongoing developments, as the preemption landscape continues to evolve.
Related on this site
Practitioner analysis, current as of June 2026 — not the statute itself. Statutes are amended and decisional law evolves; confirm the operative language and current authority at the official source before relying.