UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

CHAMBER OF COMMERCE OF THE No. 20-15291 UNITED STATES OF AMERICA; CALIFORNIA CHAMBER OF D.C. No. COMMERCE; NATIONAL RETAIL 2:19-cv-02456- FEDERATION; CALIFORNIA KJM-DB RETAILERS ASSOCIATION; NATIONAL ASSOCIATION OF SECURITY COMPANIES; HOME CARE OPINION ASSOCIATION OF AMERICA; CALIFORNIA ASSOCIATION FOR HEALTH SERVICES AT HOME, Plaintiffs-Appellees,

v.

ROB BONTA *, in his official capacity as the Attorney General of the State of California; LILIA GARCIA- BROWER, in her official capacity as the Labor Commissioner of the State of California; JULIE A. SU, in her official capacity as the Secretary of the California Labor and Workforce Development Agency; KEVIN RICHARD KISH, in his official

* Rob Bonta has been substituted for his predecessor, Xavier Becerra, as California Attorney General under Fed. R. App. P 43(c)(2). 2 CHAMBER OF COMMERCE V. BONTA

capacity as Director of the California Department of Fair Employment and Housing of the State of California, Defendants-Appellants.

Appeal from the United States District Court for the Eastern District of California Kimberly J. Mueller, Chief District Judge, Presiding

Argued and Submitted December 7, 2020 San Francisco, California

Filed September 15, 2021

Before: Carlos F. Lucero, ** William A. Fletcher, and Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Lucero; Dissent by Judge Ikuta

** The Honorable Carlos F. Lucero, United States Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, sitting by designation. CHAMBER OF COMMERCE V. BONTA 3

SUMMARY ***

Federal Arbitration Act / Preemption

The panel reversed, in part, the district court’s conclusion that California Assembly Bill 51 is preempted by the Federal Arbitration Act; affirmed the district court’s determination that the civil and criminal penalties associated with AB 51 were preempted; vacated the district court’s preliminary injunction enjoining AB 51’s enforcement; and remanded for further proceedings.

AB 51, which added § 432.6 to the California Labor Code, was enacted with the purpose of ensuring that individuals are not retaliated against for refusing to consent to the waiver of rights and procedures established in the California Fair Employment and Housing Act and the California Labor Code; and to ensure that any contract relating to those rights and procedures be entered into as a matter of voluntary consent, not coercion. Other provisions of the California Code, specifically Labor Code § 433 and Government Code § 12953, render violations of § 432.6 a misdemeanor offense and open an employer to potential civil sanctions. The district court concluded that AB 51 placed agreements to arbitrate on unequal footing with other contracts and also that AB 51 stood as an obstacle to the purposes and objectives of the Federal Arbitration Act (“FAA”). The district court preliminarily enjoined enforcement of § 432.6(a)–(c) as to arbitration agreements covered by the FAA.

*** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. 4 CHAMBER OF COMMERCE V. BONTA

The panel held that California Labor Code § 432.6 neither conflicted with the language of § 2 of the FAA nor created a contract defense by which executed arbitration agreements could be invalidated or not enforced. A thorough review of the historical context of the FAA, its legislative history, and subsequent Supreme Court jurisprudence d