Martha Hoover sued American Income Life Insurance for unpaid wages and expense reimbursement, claiming she was an employee. AIL tried to force the dispute into arbitration using a contract clause. California's Court of Appeal ruled that state wage and hour claims cannot be forced into arbitration, and AIL also waived its right to arbitration by waiting 15 months before requesting it. This means workers cannot be locked out of court for statutory labor violations.
Arbitration clauses cannot override California Labor Code protections—wage claims, minimum wage violations, and expense reimbursement disputes must go to court, not arbitration
Delaying an arbitration demand for 15+ months while litigation proceeds constitutes waiver—file arbitration requests early or lose the right