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Volume XII, Number 343

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Employer Waived Right To Arbitration By Failing To Timely Pay Arbitration Fees

Espinoza v. Superior Court, 83 Cal. App. 5th 761 (2022)

Rosa M. Quincoza Espinoza sued her former employer, Centinela Skilled Nursing & Wellness Centre West, LLC, for discrimination and retaliation.  The employer filed a motion to stay the litigation and compel arbitration, invoking the terms of an arbitration agreement that Espinoza had signed.  After the employer’s motion to compel arbitration was granted, Espinoza’s counsel emailed the arbitration provider and initiated an arbitration.  On May 24, 2021, the arbitration provider sent the parties an initial invoice for an administrative fee and telephonic arbitration management conference with a due date of May 31, 2021.  On July 1, 2021, the arbitration provider confirmed to plaintiff’s counsel that it had yet to receive payment of the invoice from the employer.  Plaintiff then filed a motion in the trial court pursuant to Cal. Code Civ. Proc. §§ 1281.97 and 1281.98, contending that the employer had materially breached the arbitration agreement and waived its right to compel arbitration by failing to pay the invoice within 30 days of the due date.  Although the trial court denied the motion on the ground that defendant was in “substantial compliance” with the arbitration provision and plaintiff did not suffer “material prejudice,” the Court of Appeal held that Section 1281.97 does not contain exceptions for substantial non-compliance, inadvertent non-payment, or absence of prejudice and this interpretation of the statute is not preempted by the Federal Arbitration Act.  Accordingly, the  Court issued a peremptory writ of mandate directing the trial court to: vacate its order denying plaintiff’s motion; order the lifting of the stay of litigation in court; and determine whether plaintiff’s motion for sanctions should be granted pursuant to Cal. Code Civ. Proc. § 1281.99. See also Davis v. Shiekh Shoes, LLC, 2022 WL 16546189 (Cal. Ct. App. 2022) (employer waived right to arbitration by failing to file motion to compel arbitration for 18 months and by actively participating in the lawsuit).

© 2022 Proskauer Rose LLP. National Law Review, Volume XII, Number 327
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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
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