In this guide8 sections
No, AB 3080 did not end forced arbitration in California employment. The bill with that number in the 2023–2024 session dealt with online age verification, not arbitration, and it did not become law. As of 2026, many California employers can still require arbitration agreements as a condition of the job. But state law gives workers real protections inside arbitration, and a new law taking effect January 1, 2027 lets more workers stay in court.
Key takeaways
- California’s 2019 ban on mandatory employment arbitration (AB 51) was struck down for agreements covered by the Federal Arbitration Act and has been permanently blocked since 2024.
- Under a 2022 federal law, you can choose court over arbitration for sexual harassment and sexual assault claims, even if you signed an arbitration agreement.
- AB 2155, signed June 30, 2026 and effective January 1, 2027, brings that rule and the federal exemption for transportation workers into California’s own arbitration law.
What happened to California’s arbitration ban
In 2019, California passed AB 51, which added Labor Code §432.6 and barred employers from requiring workers to waive the right to a court as a condition of employment. In 2023 a federal appeals court held that the Federal Arbitration Act preempts the law, and a federal court permanently blocked its enforcement for FAA-covered agreements in early 2024. As a result, most private employers can again require an arbitration agreement as a condition of getting or keeping a job.
Where workers can still go to court
- Sexual harassment and sexual assault. The federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2022 lets the person bringing a covered claim choose court, even with a signed arbitration agreement. See our sexual harassment page.
- Transportation workers. The Federal Arbitration Act doesn’t apply to employment contracts of seamen, railroad employees and other workers engaged in foreign or interstate commerce.
- Representative PAGA claims. A 2023 California Supreme Court decision held that a worker forced to arbitrate their own PAGA claim keeps standing to pursue the claims on behalf of other employees in court. See Labor Code §2699 and PAGA penalties.
- When the employer doesn’t pay. Under Code of Civil Procedure §1281.98, an employer that drafted the agreement must pay its arbitration fees within 30 days of the due date. In an August 2025 decision, the California Supreme Court upheld that rule, but held that an employer whose late payment wasn’t willful, grossly negligent or fraudulent may be excused if it compensates the worker for any harm.
AB 2155: the 2026 change
Governor Newsom signed AB 2155 on June 30, 2026. Starting January 1, 2027, it amends Code of Civil Procedure §1281 so that an arbitration agreement is unenforceable under California’s Arbitration Act to the extent it would be unenforceable under the Federal Arbitration Act. In practice, employers can no longer use state law to force transportation workers or harassment survivors into arbitration when federal law would not. It is not a general ban on mandatory arbitration. See new California employment laws for 2027.
Rules that make an arbitration agreement fair
California courts refuse to enforce arbitration agreements that are unconscionable, meaning unfairly one-sided. For claims under FEHA and other public-protection laws, the California Supreme Court has long required an agreement to provide a neutral arbitrator, adequate discovery, a written decision, all the remedies you could get in court, and no arbitration costs you wouldn’t pay in court. Courts have struck down agreements that were hidden, misleading or slanted toward the employer. See California court rejects a misleading arbitration agreement.
Example (hypothetical): Luis, a warehouse driver who hauls goods arriving from out of state, signed an arbitration agreement at hire. If he falls within the federal transportation-worker exemption, AB 2155 should make it harder for his employer to force his wage claim into arbitration under state law from 2027 on.
What to do if you signed an arbitration agreement
- Get a copy of everything you signed or clicked, including the handbook acknowledgment.
- Don’t assume you can’t sue. The agreement may not cover your claim, may be unenforceable, or may fall under an exception.
- Keep deadlines. Arbitration doesn’t extend the time limits on your claims.
- Talk to a lawyer before your employer moves to compel arbitration. Compare the forums in arbitration vs. court.
Frequently asked questions
Can my employer make me sign an arbitration agreement to get hired?
In most cases, yes, because AB 51 is blocked for agreements covered by the Federal Arbitration Act.
Does an arbitration agreement stop me from filing a harassment lawsuit?
Not for covered sexual harassment or sexual assault claims. Federal law lets you choose court for those disputes.
What if my employer doesn’t pay the arbitrator?
If the fees are more than 30 days late, you may be able to withdraw your claim to court, unless the employer shows the delay wasn’t willful, grossly negligent or fraudulent and compensates you.
Is arbitration always worse for workers?
Not always. It can be faster, but there’s no jury and limited appeal. See mandatory arbitration clauses.
Talk to a California employment lawyer
Employees First Labor Law represents workers exclusively, in court and in arbitration. We offer free virtual consultations to review an arbitration agreement and your options. Contact us online or call (310) 853-3461.
This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.
