Judiciary Committee passes Wieckowski bill to stop companies' abuse of forced arbitration process

After forcing workers and consumers into forced arbitration, companies are delaying hearings, leaving victims with no avenue for justice

April 23, 2019

SACRAMENTO – California workers and consumers who are bound by forced arbitration agreements would be given a number of options to take companies that obstruct the arbitration process to court or compel them to continue in arbitration to resolve disputes under a bill by Senator Bob Wieckowski (D-Fremont) and Senator Bob Hertzberg (D-Van Nuys), approved by the Senate Judiciary Committee this afternoon.

“Not content with using forced arbitration to strip the rights of workers and consumers to have their day in court, now irresponsible companies are also obstructing the arbitration process, blocking another avenue for justice for Californians,” said Senator Wieckowski, a Senate Judiciary Committee member. “SB 707 will hold the companies accountable by giving workers and consumers a series of options to deter companies from withholding payment of arbitration fees to stall the process.”

Mandatory arbitration agreements are commonplace in America. More than half of the workforce has signed one as a condition of employment. When their rights are violated they cannot pursue their claims in court. They must pursue action through arbitration, which overwhelmingly favors employers over employees.  But some businesses are withholding payment to the arbitration service provider, denying workers the ability to pursue a claim.

“Companies should never be allowed to force their employees into arbitration while retaining the ability to game the system and manipulate the forum by refusing to pay their share of the arbitration fees,” said Mariko Yoshihara, policy director for the California Employment Lawyers Association (CELA). “SB 707 will provide much-needed procedural clarity for workers in the event that an employer’s non-payment of fees puts the arbitration proceedings in limbo. By providing procedural options and deterrence mechanisms, SB 707 will allow consumers and employees to fully vindicate their rights.”

SB 707 would declare employers in breach of their arbitration provision if they fail to pay fees within 30 days of their due date. Workers and consumers could withdraw their claims from arbitration and proceed in court. They could continue in arbitration if the arbitration service provider agrees to continue. Under the bill, the employer would have to pay the unpaid fees at the end of the proceeding. 

Another option is to petition the court for an order compelling the employer to pay the arbitration fees under the parties’ contract. The workers and consumers could also pay the unpaid fees in order to continue the arbitration, and recover the employer’s share of the fees at the end of the proceeding whether the workers and consumers win or lose.

In addition to CELA, SB 707 is supported by the Consumer Attorneys of California, SEIU California, the Conference of California Bar Associations and Equal Rights Advocates.

Senator Wieckowski represents the 10th District, which includes southern Alameda County and parts of Santa Clara County.