Governor Newsom signs Wieckowski arbitration bill to eliminate corporate delay tactics

September 22, 2021

SACRAMENTO – Seeking to end delays that allow corporations to put off the arbitration claims of their workers and consumers, Governor Gavin Newsom today signed SB 762 by Senator Bob Wieckowski (D-Fremont) to speed resolutions of arbitration cases by specifying due dates and requiring consent from all parties before adjusting deadlines. The bill passed the Legislature with broad bipartisan support and tightens an arbitration law authored by Wieckowski and signed by Newsom in 2019.

“Rather than looking for loopholes to delay access to an arbitration system that they forcefully funnel their employees and customers into, corporations should seek quick resolutions to these claims so the disputes can be concluded in a timely manner,” said Wieckowski, a member of the Senate Judiciary Committee and a frequent advocate for arbitration reforms. “SB 762 will eliminate situations where the corporations and arbitration firms have agreed amongst themselves to delays without the knowledge or consent of the person who filed the claim.”

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. These 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 often attempt to strategically withhold or delay payment to the arbitration service provider to obstruct the arbitration proceeding. Blocked from the courts and delayed in arbitration, claimants cannot get their cases resolved.

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.

“We applaud the Governor for signing SB 762 today,” said Mariko Yoshihara, legislative counsel and policy director of the California Employment Lawyers Association (CELA). “This measure will help prevent prejudicial delays in the arbitration process and allow employees and consumers to enforce their rights under the Forced Arbitration Protection Act of 2019 (SB 707).”

Yoshihara said abuses are still occurring despite the previous legislation.

“In one case, a worker had to wait nearly 10 extra months to start the arbitration proceeding because the employer had reached out to the arbitration provider – without the worker’s knowledge – to obtain an extension to the original due date of the arbitration fees,” she said. “SB 762 addresses this loophole and strengthens the protections under the Forced Arbitration Protection Act of 2019 by requiring that all parties be notified and provided with the invoices for arbitration fees and that all parties consent before any deadline for payment is extended.”

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.