The US state of California has recently passed new legislation that includes two additional statutes including a strengthening of the arbitration processes. These were created with the purpose of increasing the protection granted to the employees during arbitrating processes that settle workplace disputes. Historically, throughout the country, the arbitration procedures were often lengthy and complex ventures that impacted the employer and the employee.
Now, the California law designed to provide additional arbitration protection seems to be slightly tipping the scales in the advantage of the employees. Here are the key facts about the changes and the way they can impact both sides in any such dispute.
SB 1007 and SB 1241
The statutes, both of which were passed in September 2016, impact the arbitration proceedings. The first, SB 1007 covers the right to have a shorthand reporter fully transcribe any proceedings, hearings or depositions and transform them this way into an official record.
The second new statute, SB 1241 says that any arbitration provisions cannot require any employee in California to arbitrate their individual claims in other US states. It also forbids the arbitrators from applying laws that are present in some other states.
Implications of the Statutes
The implication of the first statute, the SB 1007 is clear – an arbitration proceeding will have a certified shorthand reporter with the task of transcribing any exchange between the employee, employer and their legal representatives. The second statute, the SB 1241 is more significant because it essentially states that an arbitration proceeding cannot include the possibility of processing the claim in another state and under the laws of that state.
This mainly impacts bigger business organizations like corporations that could, in theory, move the arbitration proceedings into a state which laws are friendlier to their legal goals.
The Level of Arbitration Protection
The provided level of protection in the case of arbitration procedures in California does help the employees, but this legal avenue is still preferable for a company than official court proceedings. Firstly, they avoid jury verdicts that are often emotionally driven and less impacted by rational facts.
Then, they also provide a more streamlined process that demands less time and effort from the participants and includes a lower level of public exposition, especially from the attention of the media. For a range of business organizations, this alone could be reason enough to choose arbitration.
Finally, the arbitration proceedings are generally less expensive than a court procedure and the fees of the lawyers included are most of the time lower than that of a court appearance.
With all of these facts, it is clear that the changes in the California’s laws do provide a higher level of arbitration protection for the employees, but still make the actual legal mechanism more effective for the majority of employers than a court procedure.