Arbitration, Employment: Where Employer Did Not Timely Pay Arbitration Expenses Within 30 Days And Employee Opted To Stay In Arbitration, Employee Can Get Recovery Of All Arbitration Expenses, Including Fees Through The End Of The Arbitration

Although Unpublished, This Is An Important Reminder To Employers On Timely Paying Arbitration Fees, Under Penalties Even If Employee Opts For Arbitration.

               Although unpublished, Lehman v. MediaLab.AI, Inc., Case No. B336814 (2d Dist., Div. 5 May 19, 2025) (unpublished), is an opinion that employers need to pay attention to in case they are delinquent in paying arbitration expenses—because employee has an option to compel arbitration or return the case to a California superior court.  Employee adopted the first option, which maybe resulted in surprise exposure for employer.

               Employer failed to pay for arbitration as required under CCP § 1281.97.  Employee then petitioned the lower court for an order compelling arbitration and payment of all employee’s attorney’s fees and costs “related to the arbitration.”  Alternatively, employee only asked for payment of fees to compel arbitration.  After a contested hearing, the lower court awarded fees of $4,240.20 in fees and costs for employee’s expenses in filing the petition to compel arbitration.

               On appeal, employee obtained a reversal.  The appellate court viewed the “related to arbitration” language as allowing an employee to recover more than just motion to compel arbitration costs, which it decided were allowable more than just these limited fees.  It indicated that this was the penalty for noncompliance where an employee opted to still pursue arbitration—so, an employee might be able to get fees and costs for the entire arbitration, if we are reading this decision correctly.   Quite a result and an exposure for noncompliant employers.