Can You Be Fired for Refusing to Sign an Arbitration Agreement in California?

In most cases, yes. California is an at-will state, and the law passed to stop employers doing this was blocked by a federal court in 2023. But signing does not hand over your legal claims. It changes the room they get decided in. And one category of claim, sexual harassment and sexual assault, cannot be forced into arbitration at all.

At a glance

If your employer just handed you an arbitration agreement and implied that signing is not optional, here is the honest position.

• Refusing can cost you the job. There is no reliable protection against that in California today.
• The law you may have read about does not protect you. Labor Code 432.6 was meant to. A federal appeals court held it cannot be enforced against arbitration agreements.
• Signing does not delete your rights. Your discrimination, retaliation, wage and wrongful termination claims all survive. They get heard by a private arbitrator instead of a jury.
• Sexual harassment and sexual assault claims are the exception. Federal law lets you take those to court no matter what you signed.
• The agreement itself can be unenforceable if it is one-sided enough. California courts apply a five-part test.

Can my employer fire me for refusing to sign?

Usually, yes. California employment is at-will, which means either side can end the relationship for any reason that is not itself illegal. Refusing to sign a document your employer wants signed is not, by itself, a protected act.

That surprises people, because California did pass a law aimed squarely at this problem.

What about the California law that was supposed to stop this?

It exists, and it says what you would hope it says. It just cannot be enforced against arbitration agreements.

Labor Code section 432.6 (you may have seen it called AB 51) says an employer shall not, as a condition of employment or continued employment, "require any applicant for employment or any employee to waive any right, forum, or procedure." Subdivision (b) goes further and says an employer shall not "threaten, retaliate or discriminate against, or terminate any applicant for employment or any employee because of the refusal to consent to the waiver."

Read on its own, that is a direct ban on firing you for refusing.

Subdivision (f) takes most of it back. It says nothing in the section "is intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act." The Federal Arbitration Act is the federal law that makes arbitration agreements binding, and it covers most employment arbitration agreements.

In 2023, the Ninth Circuit Court of Appeals resolved the tension in Chamber of Commerce v. Bonta. The court concluded "that the FAA preempts AB 51 as a whole to the extent it applies to arbitration agreements." Its summary is a single line: "AB 51 is preempted by the FAA."

So if a page tells you California law makes it illegal to fire you for refusing to arbitrate, that page is out of date. The statute is still printed in the Labor Code. It does not protect you against an arbitration agreement.

What am I actually giving up if I sign?

This is the part worth getting right, because it is usually smaller than people fear and different from what they assume.

You are not giving up your claims. Discrimination, harassment, retaliation, unpaid wages, wrongful termination: all of it survives. An arbitration agreement is about where a dispute is decided, not whether you have one.

What changes:

• A private arbitrator decides instead of a jury. One person, chosen under the agreement's rules, rather than twelve members of the public.
• The process is private. No public court file, no public verdict.
• Appeal rights are very limited. Losing an arbitration is close to final, even where a judge might have got it wrong.
• Most agreements also waive class and collective actions, so you bring your claim alone rather than alongside colleagues with the same complaint.

None of that makes a claim worthless. It does change the strategy, and it is worth understanding before you sign rather than after something goes wrong.

The one thing an arbitration agreement cannot touch

If your dispute is about sexual harassment or sexual assault, you can take it to court regardless of what you signed.

This comes from a federal law with a long name, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. Under 9 U.S.C. section 402(a), "no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute."

Two details matter.

The choice is yours. The law works at the election of the person alleging the conduct. You can still use arbitration if you prefer the privacy. Your employer cannot force it on you.

It applies going forward. An agreement you signed years earlier is still overridden, as long as the conduct happened recently enough. The Act was approved on 3 March 2022, and it applies "with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act."

If you are reading this while deciding whether to sign, that is the reassurance worth having: the worst category of workplace misconduct is the one your signature cannot lock away. Our guides to quid pro quo sexual harassment and what makes a work environment legally hostile explain what those claims look like.

When is an arbitration agreement unenforceable in California?

Signing a bad agreement is not the end of the argument either. California courts will refuse to enforce one that is stacked too far in the employer's favor.

In Armendariz v. Foundation Health Psychcare Services, the California Supreme Court set out what a mandatory employment arbitration agreement has to do to be lawful. It must:

1. provide for neutral arbitrators
2. provide for more than minimal discovery
3. require a written award
4. provide for all of the types of relief that would otherwise be available in court
5. not require employees to pay either unreasonable costs or any arbitrators' fees or expenses as a condition of access to the arbitration forum

The court also held that enough one-sided terms are fatal, not fixable: a sufficient number of "unconscionable provisions renders the entire arbitration agreement unenforceable."

Hold your own document against that list. An agreement that makes you split the arbitrator's fees, or that lets the employer sue you in court while you must arbitrate, is the kind that gets challenged.

Could firing me still be unlawful?

Sometimes, for a different reason than the refusal itself.

The question is never only "did they fire me after I refused." It is whether the firing was really about something the law protects. If you had already reported harassment, raised unpaid wages, requested a disability accommodation, or taken protected leave, and the arbitration document arrived shortly afterwards, the sequence matters. A refusal can be the stated reason while the real reason is the complaint you made two weeks earlier.

That is a retaliation question, and it is fact-heavy. Our explainer on California's workplace retaliation laws sets out what counts as protected activity, and what wrongful termination actually means in California covers the wider picture.

Timing alone does not prove anything. It is a reason to have someone look at the whole sequence.

What should I do if I am handed one right now?

• Ask for time to read it. A request for a few days is reasonable and rarely refused.
• Ask for a copy, signed or not. People often sign in a portal and never see the document again.
• Read for the five points above, especially who pays the arbitrator and whether the obligation runs both ways.
• Ask whether signing is a condition of the job. Get the answer in writing if you can.
• Get it reviewed before you sign if anything is already wrong at work. That is a different conversation from a routine onboarding pack.
• Write down what happens around the request: who asked, when, and what was said about refusing.

Arbitration is not the only clause that turns up in an onboarding pack and matters later. California recently banned employers from making you repay signing bonuses and training costs when you leave, and the stay-or-pay ban covers what you no longer owe.

Ready to talk it through?

If you are weighing this up with a real problem already running in the background, a short conversation is usually enough to tell you what you would be signing away and what you would not. We represent employees only, and consultations are free.

How long do I have to file?

An arbitration agreement does not pause any deadline. The clock runs on the underlying claim, and it runs whether your case is heading for court or for arbitration.

• Discrimination, harassment and retaliation under California's Fair Employment and Housing Act start with a complaint to the Civil Rights Department (CRD) (formerly DFEH). Government Code section 12960(e)(5) allows three years from the date the unlawful practice occurred.
• Once the CRD issues a right-to-sue notice, Government Code section 12965(c)(1)(D) allows one year from the date of that notice to bring the action.
• A personal injury claim carries two years under Code of Civil Procedure section 335.1.

Public agency employers carry their own, much shorter deadlines. Our article on how long you have to file a wrongful termination claim sets out the full picture. Deadlines can run early, so confirm yours rather than estimating.

Frequently asked questions

Can I be fired for not signing an arbitration agreement in California?

In most cases, yes. California employment is at-will, and refusing to sign is not on its own a protected act. Labor Code section 432.6 was written to prohibit exactly this, but in 2023 the Ninth Circuit held in Chamber of Commerce v. Bonta that "AB 51 is preempted by the FAA", so it does not protect you. A firing can still be unlawful if the real reason was something protected, such as a complaint you had already made.

Do I have to sign an arbitration agreement at work?

No law forces you to sign. Your employer is also generally free to treat signing as a condition of employment or continued employment. That is the practical bind: the choice is real, and so is the consequence. Ask for time to read it, and get it reviewed if there is already a problem at work.

Does signing an arbitration agreement mean I lose my rights?

No. It changes the forum, not the claim. Your discrimination, retaliation, wage and wrongful termination claims survive. They are heard by a private arbitrator rather than a jury, the process is confidential, appeal rights are narrow, and most agreements also stop you joining a group claim.

Can I still sue for sexual harassment if I signed an arbitration agreement?

Yes. Under 9 U.S.C. section 402(a), a predispute arbitration agreement is not valid or enforceable against a case relating to a sexual assault or sexual harassment dispute. The election belongs to the person alleging the conduct, and the law applies to any dispute or claim arising or accruing on or after 3 March 2022.

What makes an arbitration agreement unenforceable in California?

Under Armendariz v. Foundation Health Psychcare Services, a lawful mandatory employment arbitration agreement must provide neutral arbitrators, more than minimal discovery, a written award, and all the types of relief available in court, and must not make the employee pay unreasonable costs or the arbitrator's fees to get through the door. Enough one-sided provisions make the whole agreement unenforceable.

Does an arbitration agreement change my filing deadlines?

No. The deadlines run on the claim itself. A FEHA complaint goes to the Civil Rights Department within three years of the unlawful practice, and once a right-to-sue notice issues you have one year to file. Some situations are shorter, so confirm your own dates early rather than assuming arbitration buys time.

Where to start

If you have been handed one of these and nothing has gone wrong yet, read it carefully, ask for time, and know that signing does not surrender your claims. If something has already gone wrong, the order of events matters and it is worth getting the document and the timeline looked at together.

Either way, the assessment is quick and it is free. Tell us what happened and what you were asked to sign, and we will tell you where you stand.

The Law Offices of Jonathan J. Delshad is a Los Angeles based employment law firm representing employees across California in wrongful termination, discrimination, retaliation, harassment, and wage and hour matters. Representing employees is the core of the firm's practice. Mr. Delshad serves as Editor-in-Chief of the California Wrongful Termination Law Review and trained at Latham & Watkins. Recognition includes Super Lawyers (2022 to 2026), Best Lawyers (since 2017), and an Avvo 10.0 "Superb" rating. Reviewed for California employment law accuracy. Last updated: August 10, 2026.

Attorney advertising. This article is educational only and is not legal advice. Reading it does not create an attorney-client relationship, which exists only under a signed engagement agreement. Every case is different, and outcomes depend on the specific facts. Deadlines can run early, so consult a lawyer promptly about your situation.