In 2019, the California legislature amended the California Code of Civil Procedure to require the timely payment of arbitration fees and costs by employers. Failure to make timely payment constitutes a waiver of the right to arbitrate. (The same rule applies to consumer arbitrations.)
Section 1281.98(a)(1) of the Code of Civil Procedure provides that in an employment or consumer arbitration, if the drafting party does not pay the invoiced costs and fees to the arbitration provider within 30 days of the due date, that party “is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel the employee or consumer to proceed with that arbitration.”
In Cvejic v. Skyview Capital, LLC, the appellate court found that by failing to pay the required fees within 30 days of the due date, the employer was in “material breach of the arbitration agreement” even though the arbitration panel actually set a later payment deadline after being notified of Skyview’s failure to pay. The court held that the new deadline did not retroactively “cure” Skyview’s material breach and subsequent triggering of Section 1281.98.
Employers and their counsel must thus be vigilant in making timely payment of the arbitration fees and costs as soon as they get the bill.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
Leave a Reply