CA Employer Wins Arbitration Dispute

May 14, 2009 ( - The California Court of Appeal has ruled that an employer did not necessarily waive its right to arbitrate workplace claims by participating in the early phases of litigation.

The court also ruled that a lower court judge was correct in asserting that the arbitration agreement between Gabriela Roman and her employer,Flo-Kem, Inc. covered any claims growing out of the employment relationship.

Gabriela Roman, an accounts receivable clerk, was diagnosed in 2007 with depression, placed on disability leave, and subsequently terminated.   Roman sued for wrongful termination. At first, Flo-Kem participated in the litigation but, two months later, moved to have the matter submitted to arbitration – an option the company’s employees agreed to as part of their employment application.

Roman claimed the employer had started participating in the suit, so it could not then turn around and have the matter moved to arbitration, but the lower court rejected the arguments.

Arbitration Clause

The appellate court rejected claims the arbitration clause was buried in legal language and that “I agree…” phrase on the application unfairly only bound the employee and not the employer.

Appellate judges held that the arbitration agreement did not unfairly limit the parties’ rights to discovery because the rules authorized the arbitrator to order “such discovery, by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration.” 

“This decision provides welcome relief to employers seeking to enforce arbitration agreements in California, particularly on the issue of waiver,” commented Jackson Lewis, a law firm specializing in employment law. “It confirms that mere participation in preliminary litigation likely will not constitute a waiver. “

The California appellate ruling is available  here .