Semprini v. Wedbush Secs. Inc., 101 Cal. App. 5th 518 (2024)

Joseph Semprini originally filed a lawsuit against his employer in 2015, which included individual claims, class action claims and a cause of action under the California Labor Code Private Attorneys General Act of 2004 (“PAGA”). Soon after this, Semprini and the employer entered into a stipulation to arbitrate plaintiff’s personal claims but have his class and PAGA claims proceed in court. The class was certified in 2017 and trial was scheduled to begin in October 2023. However, five months before trial, the employer attempted to compel the non-representative PAGA claims to arbitration, relying on the Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022) and the fact that class members who still worked for the employer signed new arbitration agreements in September and October 2022. The trial court denied the employer’s motion, finding it had waived its right to compel arbitration by entering into the 2015 stipulation.

The Court of Appeal affirmed the trial court’s decision to deny the motion to compel arbitration but on a different basis as “a subsequent change in the law may constitute good cause for failure to assert a right to arbitrate earlier.” The appellate court held that even if Viking River or the 2022 arbitration agreements gave the employer a new right to move to compel certain claims to arbitration, the employer waited too long to make its motion, particularly in light of the looming trial date. “It is well established that a four to six month delay in enforcing the right to arbitrate may result in a finding of waiver if the party acted inconsistently with the intent to arbitrate during that window.” See also Reynosa v. Superior Court, 2024 WL 1984884 (Cal. Ct. App. 2024) (yet another case holding that an employer waived its right to compel arbitration by failing to timely pay arbitration fees).