California & Connecticut Enact New Laws About Arbitration

By Leslie King O’Neal

California Arbitration Agreements Must Follow FAA Exemptions

The Golden State enacted a law[i] stating that CA arbitration agreements will follow the Federal Arbitration Act’s exemptions[ii], eliminating other state law exemptions to arbitration. [iii] Gov. Gavin Newsom signed the law on June 20, 2026. It takes effect on January 1, 2027. The new law amends Sec. 1281, CA Code of Civil Procedure regarding arbitration, stating:

(b) It is the purpose of this act to incorporate into the California Arbitration Act any and all exclusions under the Federal Arbitration Act (9 U.S.C. Sec. 1 et seq.), including contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce, and the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 U.S.C. Sec. 401 et seq.), including claims that relate to a sexual harassment dispute or sexual assault dispute.

This will affect seamen, railroad workers and other workers involved in certain types of transportation, who are exempt from arbitration under FAA §1.[iv] It also includes the exemptions for sexual assault and sex discrimination claims under the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.”[v] California employers may want to review arbitration agreements in employment contracts for compliance with the new law.

Connecticut Law Requires Arbitrators to be Members of the Connecticut Bar

Tucked away in a bill concerning “Judicial Branch Operations”[vi] is a provision stating only persons who are members of the Connecticut Bar in good standing can be appointed as arbitrators for arbitrations conducted in Connecticut. The law specifically states:

(c) when an agreement to arbitrate includes the method for selecting an arbitrator for an arbitration proceeding to be conducted in this state, no person may be appointed or serve as the arbitrator for the arbitration proceeding unless, at the time the person is appointed as arbitrator, and thereafter throughout the duration of the arbitration proceeding, such person is a member in good standing of the bar of this state, unless all parties to the agreement to arbitrate execute a written waiver of the requirements of this subsection as relate to the arbitrator’s qualifications.[vii] (emphasis added)

Parties May Waive Requirements by Written Agreement

Effective July 1, 2026, the law allows parties to waive its requirements, if all parties sign a written agreement.  Parties may object to an arbitrator’s qualifications within fourteen days from receiving notice of an arbitrator’s appointment for. Parties may object to an arbitrator’s continued service in arbitrations pending on July 1, 2026, if an evidentiary hearing hasn’t begun. The law provides:

For any arbitration proceeding pending in this state on July 1, 2026, in which an evidentiary hearing has not commenced, any party to the arbitration proceeding may file a written objection to the continued service of the arbitrator. A determination on the objection to the continued service of the arbitrator and whether a successor arbitrator is to be appointed shall be made in accordance with the provisions of this section.

Determining Objections to Arbitrators & Appointing Successors

While the law states that objections to an arbitrator’s continued service and whether a success should be appointed “shall be made in accordance with the provisions of this section,” it does not provide a process for these tasks. The Connecticut arbitration law is a version of the “Revised Uniform Arbitration Act.”[viii] Section 52-407kk provides that if the parties haven’t agreed on a method to appoint an arbitrator, upon a party’s motion, the court shall appoint one. If the arbitration is governed by AAA or JAMS rules, those will provide the method to object to an arbitrator’s service and a method to appoint a successor arbitrator. Presumably, the statutory method would apply if an arbitrator was disqualified because he or she was not a member in good standing of the Connecticut Bar and there were no applicable rules. Perhaps the Connecticut legislature or courts will provide clarification on this sometime soon.

Takeaways

• State legislatures continue to make changes to their arbitration laws. Arbitrators and lawyers need to be aware of changes affecting jurisdictions where they practice.
• Arbitrators and lawyers in California and Connecticut should review these new laws to determine how they may affect current or future arbitrations.
• Reviewing  standard arbitration clauses periodically to be sure they comply with applicable laws is a good practice for lawyers and for clients.

---

[i] Assembly Bill No. 2155, Amending Sec. 1281 CA Code of Civil Procedure. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB2155

[ii] 9 U.S.C §§1-16; §§401-402.

[iii] 9 U.S.C. § 401 et seq.

[iv]  “[N]othing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

[v] See Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022) (airline ramp supervisor was “transportation worker”)  https://www.supremecourt.gov/opinions/21pdf/21-309_o758.pdf; Bissonnette v. LePage Bakeries, LLC, 601 U.S. 246 (2024) (bakery distributor was a “transportation worker”). https://www.supremecourt.gov/opinions/23pdf/23-51_6647.pdf

[vi] Substitute Senate Bill 475, Public Act No. 26-92, Sec. 24. Section 52-407kk of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2026). https://www.cga.ct.gov/2026/act/pa/pdf/2026PA-00092-R00SB-00475-PA.pdf

[vii]  Id.

[viii]Chapter 909, https://www.cga.ct.gov/current/pub/chap_909.htm#sec_52-407aa