99 Cal.App.5th 32
Cal. Ct. App.2024Background
- Plaintiff Onecimo Sierra Suarez filed a civil action alleging wage and hour violations against his employer, Rudolph & Sletten, Inc. (R&S).
- The employment agreement contained a mandatory arbitration clause; the court stayed the civil action and compelled the parties to arbitration.
- Suarez initiated arbitration, and JAMS invoiced both parties their respective filing fees on December 2, 2022 (R&S: $1,350; Suarez: $400).
- R&S paid its share of the fee on January 4, 2023, more than 30 days after the invoice was issued.
- Suarez moved to lift the litigation stay, arguing R&S waived the right to arbitrate due to late payment; the trial court denied Suarez’s motion, accepting R&S’s argument that statutory extensions applied.
- Suarez petitioned for writ relief to vacate the order, raising questions about strict enforcement of arbitration fee deadlines under California law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statutory deadline for employer’s payment of arbitration fees was improperly extended | Strict 30-day deadline applies; late payment means waiver | Extensions under Code of Civil Procedure §§ 12 and 1010.6 apply, making payment timely | Deadline was not extended; 30-day rule strictly enforced |
| Whether an employer’s failure to pay on time is a material breach and waives right to arbitration | Untimely payment is a material breach and waives arbitration right | Not a material breach; even if late, various excuses apply | Late payment is a material breach; waiver applies |
| Whether FAA preempts California’s strict arbitration fee statute (§1281.97) | No preemption; state law sets procedural rules | State law is preempted due to arbitration-specific rule | No preemption; procedural rule is valid |
| Whether employee’s failure to pay their own share affects employer’s breach | Statute focuses on employer’s obligations, not employee's payment | Employee didn't pay either, so arbitration not initiated | Employer’s obligation is independent; employee’s payment not determinative |
Key Cases Cited
- Gallo v. Wood Ranch USA, Inc., 81 Cal.App.5th 621 (Cal. Ct. App. 2022) (material breach and waiver from untimely payment of arbitration fees)
- De Leon v. Juanita’s Foods, 85 Cal.App.5th 740 (Cal. Ct. App. 2022) (purpose of strict enforcement of arbitration fee payment deadlines)
- Doe v. Superior Court, 95 Cal.App.5th 346 (Cal. Ct. App. 2023) (construction and policy behind statutory time limits for arbitration fees)
- Espinoza v. Superior Court, 83 Cal.App.5th 761 (Cal. Ct. App. 2022) (California Arbitration Act procedural rules not preempted by the FAA)