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New California Labor Law Limits On Private Lawsuits

Updated: Dec 26, 2022

Discussing Arbitration And Labor Law Lawsuits In California

When your California labor law rights are violated, you can report your boss and agree to a settlement equivalent to the losses you suffer. For example, if you experienced discrimination at work, you can report your boss and have a California Employment Lawyer send them a demand letter that would initiate a negotiation for settlements.

However, if your employer still refuses to go into or agree to an appropriate settlement, you can take them to court and pursue a private suit against them. In some cases, where the labor rights violations affected many other employees, an employer could face a class-action lawsuit.

That said, business owners and employers have been citing arbitration clauses in contracts that have gone ignored for years. They argue that if there is an arbitration clause in the employee's contract, they shouldn't directly go for private lawsuits.

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What's Changed In California Employment Law?

The Supreme Court severely curtailed a state labor legislation that allowed individuals to sue on behalf of groups of employees, even if they had already consented to individual arbitration of their issues.

California is the only state that permits such private lawsuits to enforce its labor laws. However, the court found that by doing this, the state gave workers a way out of signing binding arbitration agreements when they were hired.

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How Was The News Received?

A group of California employers who were challenging the law said that it had prompted a small number of plaintiffs' law firms to frequently bring expansive claims against businesses, accusing them of numerous infractions that had an impact on hundreds or even thousands of employees.

They claimed that businesses would face a pricey judgment if they refused to settle. In addition, they asserted that workers must comply with arbitration agreements they have voluntarily signed.

State attorneys and judges argued the cases spoke for the state, not the employees named as plaintiffs, in defense of the law.

The decision shouldn't impact Unions that frequently arbitrate conflicts on behalf of groups of workers. In that case, arbitration has been chosen by both the employer and the employees.

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That said, this doesn't mean you can't file claims or pursue class-action lawsuits at all. As mentioned, arbitration has been used for many of these cases already, yet private suits still exist and can be successful when done right.

However, it might be crucial for you and your California Employment Lawyer to review your contract before deciding on your next move. is an established online Lawyer Referral Service that refers you to an Employment Lawyer in Los Angeles (and other cities!). You may contact us through our 24/7 live chat (or complete our case details submission form) for a free initial consultation.


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