Dept. of Fair Employment and Housing v. Cisco Systems, Inc.
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Cisco Systems, Inc. hired “John Doe” in September 2015 to work as an engineer. 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” Doe’s employment, including claims of discrimination, retaliation, and harassment.
Several years after signing the agreement, Doe filed a complaint with the California Department of Fair Employment and Housing, alleging Cisco discriminated against him because of ancestry or race. He reported that two supervisors denied him opportunities and disparaged him because, under the traditional caste system of India, he was from the lowest caste and they are from the highest. Doe also accused Cisco of retaliating when he complained about being treated unfavorably because of his caste. The Department notified Cisco of Doe’s complaint, investigated it, and decided it had merit. Attempts at informal resolution were unsuccessful. The Department then filed a lawsuit against Cisco and the two supervisors. The Department alleged five causes of action alleging multiple violations of FEHA, and sought a permanent injunction preventing Cisco from committing further violations, and mandatory injunctive relief requiring Cisco to institute policies to prevent employment discrimination. The complaint also requested an order that Cisco compensate Doe for past and future economic losses. Cisco moved to compel arbitration pursuant to the agreement Doe signed. The trial court denied the motion. On appeal, Cisco argued the Department was bound by the terms of Doe’s arbitration agreement. The Court of Appeal affirmed, finding the Department acts independently when it exercises the power to sue for FEHA violations. “As an independent party, the Department cannot be compelled to arbitrate under an agreement it has not entered.”
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