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Labor/Employment

Aug. 12, 2025

Split state high court upholds employer arbitration payment deadline law

A split California Supreme Court upheld a state law requiring timely arbitration fee payments by businesses, ruling it's not preempted by federal law and allows leniency for good faith or excusable delays.

A divided California Supreme Court on Monday upheld a state law requiring employers and businesses to promptly pay arbitration fees in worker and consumer disputes, rejecting claims it is preempted by the Federal Arbitration Act.

The majority ruling drew a separate concurring and a dissenting opinion.

The majority opinion, written by Justice Goodwin Liu, clarified that Code of Civil Procedure Section 1281.98 does not automatically strip a drafting party of arbitration rig...

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