Scathing dissent on California’s rule regarding latepayment of arbitration fees

A justice on the California Court of Appeals delivered candid, practical, and scathing criticism of the state’s “hair-trigger” rule permitting employees to withdraw from arbitration if employers don’t pay arbitration invoices within 30 days. The majority held that because the late-payment rule encourages speedy resolution, it is a “friend of arbitration,” and the Federal Arbitration Act (FAA) doesn’t preempt it. But as the dissenting opinion argued, “a friend of arbitration does not make the arbitration agreement unenforceable. Federal law does not allow a state to save arbitration by destroying it.” After six rebukes from the U.S. Supreme Court about California’s antiarbitration laws, the dissenting justice believes “we should get the message.” The dissenting opinion agreed with federal cases holding that the FAA preempts the late-payment rule.

Trial court compels arbitration

Dana Hohenshelt worked for Golden State Food Corp., and in November 2020, he filed a complaint in the Superior Court of Los Angeles alleging retaliation under the Fair Employment and Housing Act (FEHA) and failure to timely provide copies of wage statements and personnel records in violation of the labor code. Golden State asked the court to compel arbitration based on the parties’ agreement to arbitrate employment disputes, and the trial court granted the request and stayed (halted) court proceedings pending the completion of binding arbitration.