“California bar on mandatory arbitration doesn’t violate FAA – 9th Circ.”

Reuters offers this analysis of yesterday’s Ninth Circuit ruling upholding a California statute rendering unlawful an employer’s requirement that employees agree to the arbitration of disputes. The panel, in a sharply divided 2-1 decision, held that the California statute is not preempted by the Federal Arbitration Act’s admonition that an agreement to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

The jurisprudence regarding the scope of arbitration preemption already is substantial, but this decision promises to kick off a new volley of litigation activity arising out of recent years’ debate about the appropriateness of arbitration of workplace disputes.