It was long the rule in California that if a party to an arbitration agreement wanted to compel arbitration, it could wait to do so as long as the other party could not demonstrate that they were prejudiced by the delay. Practically, this meant that businesses (employers included) could compel arbitration even after months of delay as long as the other party couldn’t prove they were prejudiced by the delay.
But not anymore. Just recently, the California Supreme Court did away with this prejudice-must-be-shown requirement, effectively making it easier for a party to claim that the other side “waived” its right to arbitrate a dispute. Instead, all that is required to show that a party waived its right to arbitrate a dispute is proof that the party seeking arbitration knew of its right and acted inconsistently with the intent to arbitrate.
The takeaway: To avoid waiving the right to arbitration, employers should act quickly and assert their right to arbitrate as soon as possible to minimize the possibility that a court would say that the employer “waived” its right to arbitrate a dispute. By promptly demanding arbitration, employers can maintain their right to compel arbitration without worrying about waiving the right to arbitrate.
For more information about maintaining your right to compel arbitration, please contact MNK Law.
