Arbitration Award Stands When Employer Failed to Meet Deadline for Challenge

​Because an employer did not meet the deadline provided under the California Arbitration Act for seeking to vacate or correct an arbitration award, and the employee had timely filed a petition to confirm the award, the trial court could not consider the objections raised by the employer in its untimely petition, a California appeals court recently ruled.

Between June 2016 and May 2017, the plaintiff worked as an exotic dancer at a California gentlemen's club. She signed an agreement requiring arbitration of all workplace disputes. In January 2018, the plaintiff sued the club for failure to pay minimum wage and overtime wages, failure to pay wages for missed meal and rest breaks, waiting time penalties, and failure to provide accurate wage statements.

Relying on the arbitration clause, the trial court in May 2018 granted the club's motion to compel arbitration of the plaintiff's claims.

On March 5, 2021, the arbitrator issued a final arbitration award. The arbitrator ruled that the plaintiff was an employee—rather than an independent contractor—of the club; that the club had not complied with its duties under the California Labor Code to pay her minimum wage and overtime wages, to give her rest and meal breaks, and to provide her accurate wage statements; and that the club owed her $23,347 in damages and penalties for its noncompliance. The arbitrator also awarded the plaintiff $82,800 in attorney fees.

On March 24, 2021, the plaintiff filed a petition in the trial court to confirm the final arbitration award. The plaintiff served the petition on the club via e-mail on April 1, 2021. On May 3, 2021, the club filed and served both a stand-alone petition to vacate or correct the award and its objections to the plaintiff's motion to confirm the award, arguing in both filings that the arbitrator had exceeded his powers in determining the amount of attorney fees awarded.

The trial court denied the club's petition to vacate or correct the award and confirmed the award, finding that the club's petition was not timely because it missed the statutory deadline. The club appealed. The appellate court ruled that because the club's challenge to the arbitration award was not timely filed, the trial court was obligated to affirm the award.

Statutory Deadlines

The California Arbitration Act provides that the deadline for filing a petition to confirm an arbitration award is four years from the date the petitioner was served with the award. The act prescribes two ways to seek an order vacating or correcting an award, each with its own deadline. A party may seek an order vacating or correcting an award within 100 days from the date the petitioner was served with the award. However, if the petitioner has filed a motion to confirm the award, the opposing party must file a response within 10 days of being served with the petition to confirm.

The appeals court noted that when no petition to confirm the award is filed, the deadline is easy—namely, 100 days after the award was served on the party petitioning to vacate or correct the award. But when a petition to confirm is filed, the question becomes which deadline controls—the absolute deadline of 100 days after the award is served, or the relative deadline of 10 days after a petition to confirm the award is served. The answer is whichever deadline is shorter, the appeals court said. In this case, that would be 10 days from the date of the filing of the plaintiff's petition to confirm.

As to the question of whether these deadlines are subject to extension, the appeals court noted that the 100-day deadline is immovable because the statute setting that deadline contains no exceptions. The 10-day deadline, however, is a little more flexible, as the act itself authorizes an extension of the 10-day deadline in two situations, the court noted: When the parties agree in writing to an extension, or when the court finds good cause to extend the deadline and where such an extension would not unduly prejudice the other party.

Applying these deadlines, the appeals court said, the club's stand-alone petition and its response to the plaintiff's petition to confirm were untimely. The plaintiff's petition to confirm the arbitration award was served on the club on April 1, 2021. Under the applicable rules, the club had 10 days to ask the trial court to vacate or correct that award. But the club waited 32 days—until May 3, 2021—to file its stand-alone petition and its response to plaintiff's petition.

Neither statutory exception to the 10-day deadline was invoked here. The parties did not agree to extend the deadline. The trial court also did not find good cause to extend the deadline; instead, the court found that the club's filings had been untimely.

Where a petition to confirm an arbitration award is procedurally proper, and there is no timely filing seeking to vacate or correct the arbitration award, the trial court is obligated to confirm the arbitration award, the appeals court concluded.

Darby v. Sisyphian LLC, Calif. Ct. App., No. B314968 (Jan. 26, 2023).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.