California Supreme Court Rules FAA Does Not Preempt Arbitration Fee Deadline, Rejects Strict Penalties
On August 11, 2025, the Supreme Court of California ruled that the Federal Arbitration Act (FAA) does not preempt [ t o prevent ] a state statute requiring employers to timely pay arbitration fees or forfeit the right to arbitration . The court rejected a strict reading of the statute, finding that the law does not prevent untimely payments from being excused absent evidence of “wrongful conduct.” Quick Hits The Supreme Court of California ruled that the FAA does not preempt a state law requiring prompt payment of arbitration fees, interpreting the requirement in the context of other statutes and legal principles that may excuse an untimely payment. The court clarified that employers may not automatically forfeit their right to arbitration for late fee payments if those delays are not willful or grossly negligent. The ruling emphasizes that parties can negotiate their own payment timelines in arbitration agreements. In Hohenshelt v. Superior Court of Los Angeles County (Golden St...