Background: The Thirty-Day Arbitration Fee Rule
In 2019, the California legislature amended the California Arbitration Act (CAA) to require the party who drafts an arbitration agreement to pay all required arbitration fees within thirty days of receiving the invoice, unless the agreement provides a different deadline. A company’s failure to timely pay arbitration fees is treated as a material breach and default that allows the employee or consumer to withdraw from the arbitration and proceed in court. Code of Civil Procedure section 1281.97-1281.98. In other words, if the employer is late in paying arbitration fees it forfeits the right to require arbitration of claims.
California appellate courts have strictly interpreted and enforced the timely payment requirement with harsh results for employers. See Doe v. Superior Court, 95 Cal.App 5th 346 (2023) (arbitration forfeited when payment was mailed with 30-day period, but arrived 2 days late); Colon-Perez v. Security Industry Specialists, Inc., 108 Cal.App.5th 403 (2025) (arbitration forfeited when counsel was caught in a natural disaster and payment was 6 days late).
The Hohenshelt Decision
In its August 11, 2025 decision in Hohenshelt v. Superior Court, the CA Supreme Court held that California’s requirement for timely payment of arbitration fees is not preempted by the Federal Arbitration Act (which prohibits state laws that disfavor arbitration agreements). The Court noted that timely payment of arbitration fees...
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