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California Bill - SB 1538 
This Bill was vetoed by the Governor. 
Would have invalidated predispute arbitration agreements 
between employers and employees 
as they relate to actions for employment discrimination
pursuant to the Fair Housing and Employment Act (FEHA).
BILL NUMBER: SB 1538	ENROLLED
	BILL TEXT

	VETOED BY THE GOVERNOR SEPTEMBER 30, 2002
	PASSED THE SENATE  AUGUST 30, 2002
	PASSED THE ASSEMBLY  AUGUST 24, 2002
	AMENDED IN ASSEMBLY  AUGUST 20, 2002
	AMENDED IN ASSEMBLY  JUNE 18, 2002
	AMENDED IN SENATE  MAY 13, 2002

INTRODUCED BY   Senator Burton
   (Principal coauthor:  Senator Escutia)
   (Coauthor:  Assembly Member Wesson)
                        FEBRUARY 20, 2002

   An act to amend Section 1281 of the Code of Civil Procedure, and
to add Section 12952 to the Government Code, relating to employment
arbitration.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1538, Burton.  Employment arbitration agreements.
   Existing law generally provides that written agreements to submit
controversies to arbitration are valid and enforceable.
   This bill would amend existing law to invalidate predispute
arbitration agreements between employers and employees as they relate
to actions for employment pursuant to the Fair Housing and
Employment Act (FEHA).
   This bill would also establish that it is an unlawful employment
practice, on or after January 1, 2003, to require an employee to
waive rights and procedures established by FEHA, or to take any
adverse employment action against any person in retaliation for
refusing to waive rights and procedures established by FEHA.  This
bill would also provide that a waiver of rights or procedures
provided under FEHA must be knowing, voluntary, and not made a
condition of employment or continued employment, that a waiver of
rights or procedures provided under FEHA required as a condition of
employment or continued employment is invalid, and that a waiver of
rights or procedures provided under FEHA required as a condition of
employment or continued employment entered into prior to January 1,
2003, may be deemed involuntary as to any FEHA claim that arises on
or after January 1, 2003.  The bill would provide that the employer
has the burden of proving that any waiver or arbitration agreement
was knowing, voluntary, and was not a condition of employment or
continued employment.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares that it is the
public policy of the State of California to ensure that employees
have the full benefit of the rights and protections contained in the
Fair Employment and Housing Act and that employees not be deprived of
those rights and protections by the use of coerced and involuntary
waivers.  It is the purpose of this act to ensure that any agreement
between an employer and employee to arbitrate any claim arising under
the FEHA is a matter of consent and not coercion.
   The Legislature finds and declares that involuntary predispute
arbitration provisions that limit an employee's access to the
Department of Fair Employment and Housing as a condition of
employment and limit the authority of the department to investigate
and pursue meritorious claims of discrimination are against the
public policy of this state.
  SEC. 2.  Section 1281 of the Code of Civil Procedure is amended to
read:
   1281.  (a) Except as provided in subdivision (b), a written
agreement to submit to arbitration an existing controversy or a
controversy thereafter arising is valid, enforceable, and
irrevocable, save upon  grounds that exist for the revocation of any
contract.
   (b) Subdivision (a) does not apply to any predispute arbitration
agreement between an employer and employee that violates Section
12952 of the Government Code.
  SEC. 3.  Section 12952 is added to the Government Code, to read:
   12952.  (a) It is an unlawful employment practice, on or after
January 1, 2003, for an employer, as defined in subdivision (d) of
Section 12926, to require an employee or potential employee to waive
rights or procedures provided for in this chapter, including, but not
limited to, the right to file a complaint with the department
pursuant to Section 12960 or the right to file and pursue a civil
action pursuant to Section 12965, as a condition of employment or
continued employment.
   (b) It is an unlawful employment practice, on or after January 1,
2003, for an employer, as defined in subdivision (d) of Section
12926, to refuse to hire, harass, discharge, expel, or otherwise
discriminate against an employee or potential employee because he or
she refuses to waive rights or procedures provided for in this
chapter.
   (c) Any waiver of rights or procedures provided under the Fair
Employment and Housing Act must be knowing, voluntary, and not made a
condition of employment or continued employment.
   (1) Any waiver of rights or procedures provided under the Fair
Employment and Housing Act, including an agreement to arbitrate a
FEHA claim, that is required as a condition of employment or
continued employment in violation of subdivision (a), shall be deemed
void, unconscionable, against public policy and unenforceable.
   (2) Any waiver of rights or procedures provided under the Fair
Employment and Housing Act, including an agreement to arbitrate a
FEHA claim, required as a condition of employment or continued
employment in any contract entered into prior to January 1, 2003, may
be deemed involuntary as to any FEHA claim that arises on or after
January 1, 2003, and if so found, is unconscionable, against public
policy and unenforceable.
   (d) The employer has the burden of proving that any waiver under
subdivision (a), (b) or (c) was knowing, voluntary, and not made a
condition of employment or continued employment, or that the
arbitration agreement under subdivision (a), (b) or (c) was knowing,
voluntary, and not made a condition of employment or continued
employment.

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