A maintenance worker filed a lawsuit against his employer, alleging discrimination, unpaid wages and other violations of state labor laws. Shortly thereafter, at his employer’s request, he signed an agreement mandating arbitration of all employment-related disputes. Could he continue to litigate his claims, or did he have to submit them to binding arbitration?

That was question facing the Court of Appeal in the case of Franco v. Greystone Ridge Condominium.

In March of 2018, Victor M. Quiroz Franco and other employees of Greystone Ridge Condominium were asked to sign an agreement to submit to final and binding arbitration “any and all claims . . . relating to any aspect of . . . employment with Employer (pre-hire through post-termination).”

Ten days later, Franco filed the lawsuit against the condominium. After two more days had passed, he signed the arbitration agreement.

His employer then asked the Superior Court of Orange County to dismiss Franco’s case and compel him to arbitrate his claims.

Franco’s attorneys argued that the lawsuit should be allowed to continue, because it is “well-settled in California that legal claims embodied in a lawsuit which is filed before the Plaintiff signs an arbitration agreement cannot be subject to arbitration unless the agreement expressly covers a pre-existing lawsuit.”

In this case, his attorney pointed out, Franco had “filed a valid lawsuit in California Superior Court” before he signed the agreement to arbitrate.

The trial court denied the request to compel arbitration and ruled that the litigation could go forward. The employer appealed.

The Court of Appeal reversed the lower court.

The appellate justices cited the reference in the agreement to claims relating to “pre-hire” matters. That phrase “expresses an intent to cover all claims, regardless of when they accrued,” they held.

The arbitration agreement was “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,” the appellate justices ruled.

“The Agreement contains language that refers to claims related to ‘pre-hire’ issues and thus contains an express reference that the Agreement applies to claims existing before it was executed,” they noted.

They ruled that the trial court should have granted the motion to compel arbitration, and awarded costs to the employer.

By Laurie Murphy