DFEH not bound by employment arbitration agreement

You enter into a perfectly drafted arbitration agreement with an employee. After he files an administrative charge with California’s Department of Fair Employment and Housing (DFEH), the agency takes over the claim. Is the DFEH bound by the arbitration agreement?

DFEH takes over case

Cisco Systems, Inc., hired John Doe in September 2015 to work as an engineer. (John Doe is a fictitious name used in the trial court proceedings to protect the employee’s privacy.) Doe was required to sign an arbitration agreement as a condition of his employment. Under the agreement, Cisco and Doe had to arbitrate “all disputes or claims arising from or relating to” his employment, including claims of discrimination, retaliation, and harassment.

Several years after signing the agreement, Doe filed a complaint with the DFEH alleging he was the victim of caste discrimination because he comes from the lowest caste—and his supervisors from the highest—within the traditional caste system of India.

The DFEH investigates violations of the California Fair Employment and Housing Act. The department has the authority to issue subpoenas, take depositions, and propound written interrogatories. If it determines the complaint has merit, the department must try to informally resolve it with the employer by “conference, conciliation, and persuasion.”