SACRAMENTO – The California State Senate Judiciary Committee approved a bill by Senator Bob Wieckowski (D-Fremont) today that cracks down on arbitration companies and businesses delaying a worker or consumer’s right to a speedy resolution to their dispute. The bill, SB 762, passed unanimously.
“It is unfortunate that this bill is needed, but the cozy relationship between arbitration companies and their business clients makes SB762 a necessity if workers and consumers are going to have their cases resolved in a timely manner,” said Wieckowski, a Judiciary Committee member. “The Legislature is compelled to act to expand transparency and strip away delaying tactics that keep people in the dark and hold up their cases.”
SB 762 requires the arbitration provider to specify the final due date of the initiation fees as soon as the worker or consumer completes their filing requirements. For other fees and costs to continue arbitration, the arbitrator must obtain consent from all parties before extending any due dates.
Over half of America’s workforce has been forced to sign mandatory arbitration provisions as a condition of employment. Mandatory provisions prevent consumers and workers whose rights have been violated from pursuing their claims in court and instead force them into arbitration proceedings that overwhelmingly favor businesses and employers. With workers and consumers barred from court, businesses are able to strategically withhold or delay payment to the arbitration service provider to obstruct the arbitration proceeding.
In 2019, Wieckowski and Senator Bob Hertzberg (D-Van Nuys) jointly authored SB 707, which was signed by Gov. Newsom. It gives consumers and workers procedural options in the event a corporation delays arbitration or fails to pay its share of the fees within 30 days of the due date. But arbitration providers do not always disclose when the corporation’s fees are due and they often negotiate with them and grant a company’s request to extend the due date without informing the consumer or worker. This leaves workers in the dark about their potential remedies under SB 707.
SB 762 will shine more light on the process.
“Workers and consumers bound by forced arbitration agreements already face an uphill battle to obtain justice,” said Mariko Yoshihara, legislative counsel and policy director of the California Employment Lawyers Association (CELA). “SB 762 will help ensure companies are not delaying payment in order to frustrate the arbitration process by providing greater transparency around the payment of arbitration fees.”
In addition to CELA, SB 762 is also supported by the California Labor Federation, Consumer Attorneys of California, California Rural Legal Assistance Foundation, California Work & Family Coalition and Equal Rights Advocates.
Senator Wieckowski represents the 10th Senate District, which includes parts of Alameda and Santa Clara counties.