Arbitration: 1/1 DCA Agrees That 30-Day Employer Arbitration Payment Deadline Is Not Preempted By The FAA

Split Is Now Present Between The Intermediate Appellate Courts On This Issue. 

               In Keeton v. Tesla, Inc., Case No. A166690 (1^st Dist., Div. 1 June 26, 2024) (published), the 1/1 DCA considered whether CCP § 1281.98(a)(1), the 30-day window for employers to pay arbitration expenses, is preempted by the Federal Arbitration Act (FAA).  After determining that was no unmistakable delegation of the issue to the arbitrator, the appellate court found that section 1281.98 was not preempted by the FAA, agreeing with Gallo v. Wood Ranch USA, Inc., 81 Cal.App.5^th 621 and disagreeing with Hernandez v. Sohnen Enterprises, Inc., 102 Cal.App.5^th 222 (2024).  Given that there is now a clear split on this issue among the intermediate appellate courts, we would predict that this case or Hernandez might be a candidate for state supreme court review.  (A petition for rehearing in Hernandez was denied on June 3, 2024.)