A Recent California Court of Appeals Decision Should Remind Employees to be Wary of Signing Arbitration Agreements


Many employers ask new employees to sign a binding arbitration agreement, which requires an employee to give up their right to sue their employer in court for violations of employee rights.  In signing a binding arbitration agreement, employees instead agree to resolve any legal disputes through arbitration.  Employers typically prefer arbitration instead of court to avoid runaway jury verdicts.

In Quiroz Franco v. Greystone Ridge Condominium, decided just a few weeks ago, the California Court of Appeals for the Fourth Appellate District held in favor of an employer whose employee signed an arbitration agreement after the employee had already filed a lawsuit against the employer for a series of employment-based claims.  Essentially, the court held that the signing of an arbitration agreement after an employee has filed a lawsuit does not preclude compelling such claims to arbitration, as long as the claims at issue are covered by the language in the arbitration agreement.

The plaintiff’s employer gave him a binding arbitration agreement to sign on March 9, 2018, followed by a Spanish translation of the agreement seven days later.  On March 19, 2019, the plaintiff filed a lawsuit against his employer alleging a series of claims, including violations of California’s Fair Employment and Housing Act and the California Labor Code.  The plaintiff—still a current employee at the time—returned the signed arbitration agreement two days later.

The employer filed a motion to compel arbitration of the plaintiff’s claims.  The plaintiff argued that the arbitration agreement he signed did not expressly include the claims already filed.  Although the trial court agreed with the plaintiff’s argument, the Appellate Court disagreed.  In holding in favor of the employer, the Court reasoned that the arbitration agreement is “clear, explicit, and unequivocal with regard to the claims subject to it and contains no qualifying language limiting its applicability to claims that had yet to accrue.”

Employees should be wary of signing arbitration agreements, especially current employees after filing a lawsuit, as the ramifications of doing so can be detrimental to an employee’s potential case against their employer for workplace violations.

Workplace Justice Advocates is very experienced in aggressively fighting arbitration agreements.  In fact, in Harris v. Bingham McCutchen, LLP, WJA defeated an employer’s petition to compel arbitration in a case involving a former employee alleging wrongful termination against her former employee.

[Written by Brenda Armenta, Law Student at Chapman University Fowler School of Law]