Reasonable Limits On Employee's Time To File A Lawsuit Upheld By Appellate Court in Pearson Dental Supplies, Inc. v. Superior Court (Turcios)

Plaintiff Luis Turcios sued his former employer, defendant Pearson Dental Supplies, Inc., for age discrimination under the California Fair Employment and Housing Act (FEHA) (Click here to read the opinion: Pearson Dental Supplies, Inc. v Superior Court (Turcios)). Plaintiff signed an agreement with the employer that contained a mandatory arbitration clause for employment-related claims. The agreement contained a clause that plaintiff would waive any claims unless he submitted the claim to arbitration within one year from the date the dispute arose or from the date plaintiff first became aware of facts giving rise to the dispute.

While the arbitration agreement required that plaintiff submit the claim within one year, FEHA, in Government Code section 12960 requires a similar deadline, and provides, in part:

(b) Any person claiming to be aggrieved by an alleged unlawful practice may file with the department a verified complaint, in writing. . . .
(d) No complaint may be filed after the expiration of one year from the date upon which the alleged unlawful practice.

Government Code section 12965 also provides in relevant part:

(b) If an accusation [in the name of DFEH] is not issued within 150 days after the filing of a complaint, or if the department earlier determines that no accusation will issue, the department shall promptly notify, in writing, the person claiming to be aggrieved that the department shall issue, on his or her request, the right-to-sue notice. This notice shall indicate that the person claiming to be aggrieved may bring a civil action under this part against the person, employer, labor organization, or employment agency named in the verified complaint within one year from the date of that notice.

(emphasis added).  Defendant compelled arbitration of plaintiff’s claims and argued that the arbitration provision requiring that plaintiff file the claim within one year controlled and, therefore, plaintiff did not file a timely claim. The arbitrator agreed with the defendant’s argument and granted summary judgment in defendant’s favor. The trial court, however, vacated the arbitration award on the ground that the one-year limitation period impermissibly infringed on plaintiff’s unwaivable statutory rights under the FEHA. Defendant appealed the trial court’s ruling, resulting in this decision.

The appellate court overruled the trial court’s ruling, stating that the arbitration agreement did not infringe upon plaintiff’s unwaivable rights under FEHA. The appellate court stated:

In arguing that the arbitrator’s award violated public policy, plaintiff relies (as did the trial court) on his cause of action alleging age discrimination in violation of the FEHA. Under the FEHA, the plaintiff must file an administrative complaint within one year from the date of the discriminatory act. Then, a civil action must be filed within one year from the date the administrative agency issues a “right to sue” letter. (Gov. Code, §§ 12960, subd. (d), 12965, subd. (b).) Plaintiff urged, and the trial court found, that the arbitrator’s application of the one-year limitations period in the DRA contravened public policy because it shortened the FEHA limitations period. We disagree.

(footnote omitted). The appellate court held that the arbitrator’s enforcement of the one-year arbitral limitation period did not unfairly burden plaintiff’s opportunity to vindicate his FEHA claim. The court noted that “despite adequate opportunity to investigate, prepare, and litigate, plaintiff chose to ignore the arbitration requirement and the arbitral limitation period, and never argued that the limitation period was unconscionable when opposing the petition to compel arbitration.” The court did caution, however, that this case did have unique facts that compelled it to rule in this way. Nevertheless, this opinion confirms that employers may enter into arbitration agreements that reasonably require their employees to submit their claims in a timely manner, or else their claims will be waived.