California Requires Timely Payment of Fees & Costs for Mandatory Arbitration

On January 1, 2020, SB707 went into effect, amending Code of Civil Procedure Sections 1280 and 1281.96, and adding sections 1281.97, 1281.98, and 1281.99.

The bill provides remedies and procedural options to employees and consumers who were forced to sign a mandatory employment arbitration agreement. More specifically, a company's failure to pay all, or parts of the fees or costs required for arbitration within 30 days of their due date constitutes a breach of the arbitration agreement. It also provides that the company is subject to sanctions, and that the company waives its right to compel the employee or consumer to the arbitration process. Consequently, the employee or consumer has several options, including moving the matter to court and pursuing the payment of the fees with a court order, or the ability to recover all attorney's fees and costs due to ending the arbitration proceeding.

This bill was enacted to protect employers and consumers from those companies who obstruct arbitration by refusing to pay the required fees. Employers, service providers, or vendors will need to pay fees and costs on time in order to avoid sanctions and losing the right to compel arbitration.

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