82 Cal.App.5th 93
Cal. Ct. App.2022Background
- John Doe (pseudonym) was hired by Cisco in 2015 and as a condition of employment signed an arbitration agreement covering “all disputes or claims arising from or relating to” his employment, including discrimination and retaliation claims.
- Doe filed a discrimination and retaliation complaint with the California Department of Fair Employment and Housing (DFEH), which investigated, found merit, and unsuccessfully attempted informal resolution.
- DFEH filed a civil enforcement action under FEHA against Cisco and two supervisors; Doe was not a named plaintiff in that suit though an employee may join such actions under the statute.
- DFEH sought public-interest relief (injunctive measures, policy changes) and individual relief (economic losses, punitive damages) beyond what an individual plaintiff alone might seek.
- Cisco moved to compel arbitration based on Doe’s agreement; the trial court denied the motion and the Court of Appeal affirmed, holding DFEH cannot be compelled to arbitrate because it never agreed to do so and acts independently when enforcing FEHA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DFEH can be compelled to arbitrate FEHA claims covered by an employee’s arbitration agreement | DFEH: it never agreed to arbitrate and therefore cannot be forced to do so | Cisco: DFEH stands in Doe’s shoes and is bound by his arbitration agreement (proxy/assignee/real party in interest) | DFEH cannot be compelled; arbitration requires mutual consent and DFEH did not consent |
| Whether nonsignatory-enforcement doctrines (assumption, agency, alter ego) bind DFEH | DFEH: nonsignatory doctrines do not apply because the Department sues independently under statutory authority | Cisco: DFEH is effectively Doe’s proxy and thus falls within third‑party enforcement doctrines | Court: statutory framework and DFEH’s independent prosecutorial discretion show it is not a nonsignatory that assumed or stands in for Doe |
| Whether statutory text or legislative history requires treating DFEH as bound by employee arbitration agreements | DFEH: plain statutory language gives the Department independent authority to bring actions and seek public remedies; legislative history does not override clear text | Cisco: statutory phrases like “on behalf of the person claiming to be aggrieved” and legislative history show Department acts only as representative of employee | Court: plain statutory language controls; legislative history does not overcome the Department’s independent authority and public‑interest role |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Servs., 24 Cal.4th 83 (2000) (FEHA claims not categorically exempt from arbitration; agency enforcement remains distinct)
- EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) (federal enforcement agency not bound by employee’s arbitration agreement because it acts independently)
- Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022) (arbitration is a matter of consent; cannot compel arbitration absent contractual basis)
- Benaroya v. Willis, 23 Cal.App.5th 462 (2018) (discusses situations where arbitration may bind nonsignatories)
- Cohen v. TNP 2008 Participating Notes Program, LLC, 31 Cal.App.5th 840 (2019) (outlines doctrines for binding nonsignatories: assumption, agency, alter ego)
- Walsh v. Arizona Logistics, 998 F.3d 393 (9th Cir. 2021) (federal Department of Labor not bound by an employee’s arbitration agreement)