Employer Not Required To Initiate Arbitration Following Court-Ordered Arbitration

The California Court of Appeal recently clarified in Michelle Arzate et al. v. ACE American Insurance Company that the responsibility to initiate arbitration rests with the plaintiffs, not the employer. The case arose from a class action lawsuit regarding wage and hour violations. After the trial court granted a motion to compel arbitration, neither party initiated it. Plaintiffs sought to lift the stay, but the appellate court held that the arbitration agreement's language and the incorporated AAA rules placed the initiation burden on the plaintiffs, despite their reluctance to do so.

The California Court of Appeal clarified that in the case of arbitration agreements, the party asserting claims is responsible for initiating arbitration after a court order.

In the case of Michelle Arzate, et al. v. ACE American Insurance Company, the appellate court reversed the trial court, stating that the plaintiffs, not ACE, must initiate arbitration.

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