Quach v. California Commerce Club: waiver has teeth again
Case note · Arbitration (part of “From the recent term,” with Huerta and Adolph)
Employers who litigate first and demand arbitration later used to escape the consequences unless the employee could prove prejudice. In 2024 the Supreme Court deleted that escape hatch.
The case in brief. Supreme Court of California, decided July 25, 2024. An employee sued; the employer answered, propounded and responded to discovery, and litigated for roughly thirteen months before moving to compel arbitration. Held: the motion comes too late. California law contains no arbitration-specific requirement that the party opposing arbitration prove prejudice from the delay — waiver of the contractual right to arbitrate is judged like waiver of any other contractual right.
1 · What the court held
For decades, California courts applied a special solicitude to late arbitration demands: an employer could conduct substantial litigation and still compel arbitration unless the employee showed prejudice — a showing courts set high. Quach ends the regime, aligning state law with the U.S. Supreme Court’s Morgan v. Sundance and overruling the prejudice requirement of the older cases.1 The question now is the ordinary one for relinquished contract rights: did the party’s conduct — measured by what it did, not what the other side suffered — amount to an intentional abandonment of the right to arbitrate?
2 · Why it matters
Arbitration clauses had become a heads-I-win proposition: an employer could test its fortunes in court, take discovery it might never get in arbitration, and — if the case started looking dangerous — pull the ripcord into a private forum. The prejudice requirement made that strategy nearly free. After Quach, the strategy has a price: answering on the merits, propounding discovery, sitting on the clause for months while running up the meter, are the acts of a party choosing the courthouse, and choices have consequences. Paired with the fee-payment rule the court upheld in Hohenshelt the following year, the message across the term is symmetrical: arbitration is a forum, not a lever, and both sides’ conduct in it counts.
3 · What it did not change
A prompt, properly supported motion to compel still succeeds where the agreement is enforceable — Quach polices timing and conduct, not the institution. Nor does it reward manufactured delay by plaintiffs; the conduct examined is the moving party’s.
4 · How we use it
From the first responsive pleading, we log the employer’s litigation conduct: every merits filing, every discovery request served, every month elapsed with the clause in its pocket. If the arbitration demand eventually arrives, the waiver opposition is already half-written — from the docket itself, which is the one witness that never wavers.
- Quach v. California Commerce Club, Inc. (2024), following Morgan v. Sundance, Inc. (2022) 596 U.S. 411.
Related writing: If you signed an arbitration agreement · Four years of Lawson v. PPG
This article states California law as of its revision date and is analysis, not legal advice. Reading this site does not create an attorney-client relationship. Attorney advertising.