SACRAMENTO – California Attorney General Rob Bonta today announced that his office is co-sponsoring Senate Bill 365 (SB 365), legislation by Senator Scott Wiener aimed at leveling the legal playing field with respect to forced arbitration. SB 365 seeks to put an end to a legal loophole in forced arbitration cases where corporations are able to automatically delay court proceedings during the pendency of an appeal on a failed motion to compel arbitration, directly hampering access to justice for workers and consumers. SB 365 has been referred to the Senate Judiciary Committee, and will be heard this afternoon.
"Big businesses shouldn't be allowed to use their legal weight to sweep worker and consumer concerns under the rug," said Attorney General Rob Bonta. "Whether it's because of a defective product or failure to pay adequate wages, SB 365 will help protect timely access to justice. I'm proud to stand with Senator Wiener as a co-sponsor of SB 365. Together, we're fighting back against corporate abuse and in support of everyday Californians."
“I’m honored and grateful to have Attorney General Bonta’s support in our effort to rein in corporate abuse of forced arbitration clauses,” said Senator Scott Wiener. “Corporations should not be able to use their immense resources to bully workers and consumers into unfavorable settlements. SB 365 is a commonsense reform that will allow workers and consumers to keep disputes with corporations from being put on ice.”
“We are proud to stand with Attorney General Rob Bonta in strong support of SB 365 to put workers and consumers back on track towards justice when their rights have been violated,” said Greg Rizio, President, Consumer Attorneys of California. “Current law in California favors big corporate defendants by allowing these corporations to knowingly file frivolous appeals in order to delay court proceedings for years. SB 365 would allow those cases to move forward, protecting meaningful access to justice for countless Californians.”
“We look forward to joining efforts with Attorney General Rob Bonta on this critical measure that will stop corporations from filing meritless appeals only to delay and obstruct workers’ access to justice,” said Mariko Yoshihara, Policy Director for the California Employment Lawyers Association. “When a court finds an arbitration contract to be unlawful, a worker should be able to proceed with their claim and not have to wait years for the employer’s frivolous appeal to first be decided.”
Under current California law, corporations are able to abuse arbitration provisions to delay court actions by workers and consumers for years through the appeals process. When a court denies a defendant’s petition to compel a case to private arbitration, current law allows corporations in many cases to halt proceedings by filing an appeal that can take months or years to be heard. Meanwhile, workers and consumers are forced to wait as the harms they face go unaddressed.
These delays can directly undermine civil cases brought against a corporation as key witnesses may lose important documents, forget the facts of a case, or move away. In contrast, corporations have the time and resources to wait out lengthy appeals processes, while workers and consumers typically do not, and may choose to settle rather than delay resolution while the years long appeals process plays out. These years long appeals can happen even in extreme cases where the arbitration clauses are clearly unenforceable.
SB 365 would prevent injustice by ensuring that cases can proceed while an appeal is heard. The bill establishes that an appeal of a court’s decision denying a corporation’s motion to compel arbitration will not automatically stay the consumer's or worker’s court proceedings in the trial court while the appeal is pending. More than half of America’s workforce has been bound by forced arbitration clauses as a condition of employment, and such clauses are a common feature of consumer agreements as well.
SB 365 is also sponsored by the California Employment Lawyers Association (CELA) and Consumer Attorneys of California (CAOC).