Worker Who Filed Suit Before Signing Arbitration Pact Still Must Arbitrate Claims


By Joanne Deschenaux October 1, 2019

An employee who signed an agreement to arbitrate all workplace claims from prehire through post-termination can't proceed in court with claims against his employer, even though he filed a lawsuit before signing the agreement, a California appeals court ruled.

The court found that the parties' arbitration agreement was clear, explicit and unequivocal and contained no language limiting its applicability to future claims. On the contrary, the court said, the agreement's reference to claims relating to prehire matters expressed an intent to cover all claims, regardless of when they arose.

In March 2018, the organization's employees were presented with and asked to sign an agreement requiring final and binding arbitration of all claims related to any aspect of employment.

About 10 days later, the plaintiff filed a complaint against his employer asserting disparate treatment and harassment in violation of the California Fair Employment and Housing Act and failure to pay overtime compensation and minimum wage in violation of the California Labor Code.

Two days after filing the complaint, the plaintiff the signed the arbitration agreement and returned it to the company. The employer filed a motion to compel arbitration, which the plaintiff opposed, arguing that the arbitration agreement failed to clearly state that it covered claims that had already occurred. The trial court agreed with the plaintiff and denied the motion to compel arbitration. The company appealed.

Plain Language Provided for Arbitration

The appellate court first summed up the issue as follows: Are the plaintiff's claims subject to mandatory arbitration under the agreement even though the complaint was filed before the plaintiff signed the agreement?

To answer this question, the court looked to the language of the agreement, particularly the provision stating that it applied to "any aspect of employee's employment with employer (pre-hire through post-termination)."

[SHRM members-only HR Q&A: What are the California rules regarding mandatory arbitration agreements?]

The court found that the language of the agreement was clear and explicit. There was no qualifying language or terminology used to limit the agreement's coverage based on the age of the claim. The language, the court said, unequivocally required arbitration for "any and all claims" the plaintiff had against his employer. Furthermore, the agreement specifically referred to claims relating to any aspect of employment, including prehire claims, the court said.

Thus, the appellate court reversed the trial court's decision, ordering that the claims be submitted to arbitration.

Franco v. Greystone Ridge Condominium, Calif. Ct. App., No. G056559 (Aug. 14, 2019).

Professional Pointer: An arbitration clause is a contractual agreement, and courts interpret a contract to give effect to the parties' intentions at the time the agreement was made. When contract language is clear and explicit, that language governs the court's interpretation.

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md. 


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