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New California Law May Undermine The Benefits Of Privacy Commonly Associated With Arbitration Proceedings Between Employers And Employees

On September 30, 2014, California Governor Jerry Brown signed into law AB 802 (click here for a copy). The new law applies to all consumer arbitrations commenced on or after January 1, 2015, and requires all private arbitration companies to collect, publish (on a quarterly basis), and make available to the public information in the form of a single cumulative report. The report must be available on the arbitration company's website, and in hardcopy form, and must contain all of the following information regarding every single consumer arbitration within the preceding five years:

(1) Whether arbitration was demanded pursuant to a pre-dispute arbitration clause and, whether that arbitration clause designated the administering private arbitration company.

(2) The name of the nonconsumer party, whether the nonconsumer party is a business entity, and whether the nonconsumer party initiated the arbitration.

(3) The nature of the dispute. If the dispute involved employment, the report must state the amount of the employee's annual wage divided into the following ranges: less than $100,000; $100,000- $250,000; and over $250,000. If the employee chooses not to provide wage information, it may be noted.

(4) Whether the consumer or nonconsumer party was the prevailing party in the arbitration.

(5) The total number of occasions the nonconsumer party has previously been a party in an arbitration (or mediation) conducted by that private arbitration company.

(6) Whether the consumer party was represented by an attorney and, if so, the attorney's name and the name of the attorney's law firm. (Apparently, the public does not care about the attorney who represented the nonconsumer party).

(7) The dates that: (a) the arbitration company received the arbitration demand; (b) the arbitrator was appointed; and (c) the date of disposition of the arbitration.

(8) How the arbitration was resolved, whether by: (a) withdrawal, (b) abandonment, (c) settlement, (d) award after hearing, (e) award without hearing, (f) default, or (g) dismissal without hearing. The report must also indicate whether any hearing was conducted in person, by telephone or video conference, or by documents only.

(9) The amount of the claim, the amount of any monetary award and attorney's fees awarded, and any other relief granted.

(10) The name of the arbitrator, his or her total fee for the case, the percentage of the arbitrator's fee allocated to each party, whether a waiver of any fees was granted, and, if so, how much.

Nonconsumer employers (and perhaps the private arbitration companies) will likely challenge this new law as being discriminatory against (and/or unduly burdening) arbitrations, and as conflicting with federal policy favoring arbitrations.

If you have any questions about this new law, about arbitration, or any other employment and labor law questions your company may be facing, please feel free to contact us.

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