Castelo v. Xceed Financial Credit Union
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Plaintiff sued her former employer Xceed Financial Credit Union (Xceed) for wrongful termination and age discrimination in violation of the Fair Employment and Housing Act (FEHA). The case was submitted to binding arbitration pursuant to the stipulation of the parties. The arbitrator granted summary judgment in favor of Xceed on the ground Plaintiff’s claims were barred by a release in her separation agreement. The arbitrator rejected Plaintiff’s assertion that the release violated Civil Code section 1668, which prohibits pre-dispute releases of liability in some circumstances. Plaintiff moved to vacate the arbitration award, arguing the arbitrator exceeded his powers by enforcing an illegal release. The trial court denied the motion to vacate and entered judgment confirming the arbitration award.
The Second Appellate District affirmed. The court held that the arbitrator’s ruling for clear error. The arbitrator correctly ruled the release did not violate Civil Code section 1668. Plaintiff signed the separation agreement after she was informed of the decision to terminate her but before her last day on the job. At the time she signed, she already believed that the decision to terminate her was based on age discrimination and that she had a valid claim for wrongful termination. The alleged violation of FEHA had already occurred, even though the claim had not yet fully accrued. Accordingly, the release did not violate section 1668 because it was not a release of liability for future unknown claims.
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