Many employers use arbitration agreements with their employees as a means of providing a more streamlined process than court actions for resolution of disputes.  Companies using these agreements with California employees need to be aware of a unique California law that allows an employee to move their claims into court if an employer does not timely pay invoices from the arbitration service provider.  California Code of Civil Procedure section 1281.98 provides that an employer must pay arbitration fees within 30 days after the due date specified by the arbitration service provider.  If the employer does not pay invoices within this time period, the employer is deemed to be in material breach of the arbitration agreement and the employee may then elect to withdraw the claim from arbitration and instead proceed in court.  This rule has been very strictly interpreted by California courts, which have allowed employees to proceed in court on their claims against the employer where the employer has delayed payment of one or more invoices – even by as little as two days beyond the deadline.

All employers arbitrating employment disputes in California need to be mindful of this law and ensure that they timely pay all arbitration fee invoices to avoid the possibility of the arbitration being thwarted.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Robin E. Largent Robin E. Largent

Robin Largent has been advising and defending employers for over twenty years, primarily in California state and federal courts.  Robin’s practice focuses on the defense of wage and hour class and representative (PAGA) actions.  Robin’s practice also focuses heavily on compliance and advice…

Robin Largent has been advising and defending employers for over twenty years, primarily in California state and federal courts.  Robin’s practice focuses on the defense of wage and hour class and representative (PAGA) actions.  Robin’s practice also focuses heavily on compliance and advice on best practices to prevent and mitigate the risks of employment litigation.  Robin also regularly defends employers ranging from small, locally owned businesses to large national corporations in single plaintiff employment litigation involving claims for discrimination, harassment, retaliation, breach of contract, and wrongful termination.  Robin has substantial appellate experience and success handling appeals, writ petitions, and amicus briefs in both state and federal courts on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, novel issues of interpretation of wage and hour laws, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.  Finally, Robin is well-known for her former role as Editor and primary author of the California Labor and Employment Law Blog for close to a decade.