An employer that loses an employment arbitration usually can’t get the award overturned just because the arbitrator got the facts or the law wrong. The California Supreme Court held in 1992 that awards are reviewable only on the narrow statutory grounds for vacating or correcting them, such as fraud, arbitrator misconduct, or an arbitrator exceeding their powers. A petition to vacate generally must be filed within 100 days of service of the award. That limited review is the trade-off for arbitration’s speed, and it cuts both ways.
Can a court review the arbitrator’s legal mistakes?
Generally not. In Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, the court concluded “that an award reached by an arbitrator pursuant to a contractual agreement to arbitrate is not subject to judicial review except on the grounds set forth in sections 1286.2 (to vacate) and 1286.6 (for correction).” It added that an error of law “apparent on the face of the award that causes substantial injustice does not provide grounds for judicial review.”
The court summed up the rule plainly: “an arbitrator’s decision is not generally reviewable for errors of fact or law,” as it put it. There are limited exceptions, and in employment cases the most important ones involve statutory rights that can’t be waived by contract. But an employer shouldn’t assume an unfavorable award can be challenged the way a jury verdict can.
What are the grounds to vacate?
They’re listed in the statute, and they focus on the fairness of the process. Code of Civil Procedure section 1286.2(a) says “the court shall vacate the award” if, among other things, “The award was procured by corruption, fraud or other undue means,” “The arbitrators exceeded their powers,” or a party’s rights were substantially prejudiced by misconduct of a neutral arbitrator or, under subdivision (a)(5), “by the refusal of the arbitrators to hear evidence material to the controversy.”
The statute also covers disclosure failures. An award must be vacated if the arbitrator “failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware.” Disclosure challenges are among the more successful grounds in practice, which is why arbitrator disclosures should be reviewed carefully at the start of every case, not only after a loss.
| Ground | Statute | What it requires |
|---|---|---|
| Fraud or undue means | CCP § 1286.2(a)(1) | The award was procured improperly |
| Arbitrator misconduct | CCP § 1286.2(a)(3) | Substantial prejudice to the party |
| Exceeded powers | CCP § 1286.2(a)(4) | The award can’t be corrected without affecting the merits |
| Refusal to hear evidence | CCP § 1286.2(a)(5) | Material evidence excluded, with substantial prejudice |
| Disclosure failure | CCP § 1286.2(a)(6) | A known ground for disqualification wasn’t disclosed |
How long does the employer have?
Not long. Section 1288 provides that “A petition to vacate an award or to correct an award shall be served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner.”
The employee, meanwhile, has up to four years to petition to confirm. If the employee moves to confirm quickly, the employer may need to respond sooner than the 100-day outer limit, so the deadline analysis should start the day the award arrives.
Is it worth trying?
Sometimes, but candor matters. Most petitions to vacate fail, because most losing parties are really arguing that the arbitrator got it wrong, and Moncharsh forecloses that. A petition is worth serious consideration when there’s a concrete process defect: an undisclosed relationship between the arbitrator and the employee’s counsel, an award on a claim the agreement didn’t cover, or the exclusion of evidence central to the defense.
The narrow review also protects employers. When the employer wins in arbitration, the same limits make the award very hard for the employee to overturn. Where the case is in federal court, separate rules about the court’s jurisdiction over the award can apply, covered in the firm’s post on federal court jurisdiction over arbitration awards. Whether the case belonged in arbitration at all is covered in the post on motions to compel arbitration.
What should an employer do after an unfavorable award?
Move quickly and look at the process, not just the result.
- Preserve the full arbitration file: the demand, the arbitrator’s disclosures, every order, the hearing transcript, the exhibits, and the award with its date of service.
- Calendar the 100-day deadline from service of the signed award, and notify the EPLI carrier.
- Identify every relationship the arbitrator disclosed, and research any that weren’t disclosed.
- Pull the arbitration agreement and compare the claims and remedies awarded with what it actually covered.
- Talk to counsel about whether a real statutory ground exists, and about settlement, since a petition to vacate can be expensive.
Post-arbitration strategy is part of defending California employers in arbitration and court.
Arbitration award questions employers ask
Can the arbitration agreement expand judicial review?
Some agreements try to. Whether a court will enforce a particular expanded-review clause depends on its exact wording and on which arbitration law governs. Broader review also reduces finality and can help the employee as much as the employer. Any change to the review clause should be weighed when the agreement is drafted, not after an award.
What does “exceeded their powers” mean?
It’s narrower than it sounds. An arbitrator who simply misreads the law or the evidence usually hasn’t exceeded their powers under the Moncharsh framework. The ground is more often used when the award goes beyond the claims or remedies the agreement allowed, or decides an issue no party submitted. The statute also lets courts correct, rather than vacate, an award where that can be done without affecting the merits.
Does a petition to vacate stop enforcement?
Not by itself. The employee can petition to confirm the award and turn it into a judgment. The court usually decides the competing petitions together. If the award is confirmed, the resulting judgment can be enforced like any other, and the employer then faces the same choices about appeal and security that follow a court judgment.
If your company lost an employment arbitration
If an arbitrator has issued an award against your company in a wage, discrimination, or wrongful termination case, the 100-day clock and the arbitrator’s disclosures usually matter more than the merits arguments. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving employment arbitration awards. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The governing case is Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1. The statutes are Code of Civil Procedure sections 1286.2 and 1288.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.