A recent case from the Northern District of California, Alvarado v Lowe’s Home Centers, LLC, 2018 WL 6697181 (N.D. CA. Dec. 20, 2018), highlights the importance of drafting employment arbitration agreement language to specifically include FCRA claims.
In Alvarado, the Plaintiff was employed by the Defendant between June 2015 and February 2018. Plaintiff signed an agreement to arbitrate disputes as part of her employment contract when she was hired. The arbitration agreement by its terms covered any controversy between Plaintiff and Defendant arising out of Plaintiff’s employment or the termination of Plaintiff’s employment. After her employment ended, Plaintiff brought a putative class action lawsuit alleging the Defendant conducted background checks during the hiring process without making proper disclosures. Defendant moved to compel arbitration including Plaintiff’s FCRA claims based upon the allegedly improper background check. Plaintiff argued her FCRA claims should not be subject to the Arbitration Agreement because they may have taken place prior to the arbitration agreement being executed. Plaintiff argued specifically that because neither side presented evidence of when the background check was conducted, the Court should assume it was performed before she signed the arbitration agreement. Plaintiff further argued that the Arbitration Agreement could not be applied retroactively to these claims because the agreement did not unambiguously state it has retroactive effect.
The Court disagreed with Plaintiff’s theory and granted the Defendant’s Motion to Compel Arbitration. In doing so the Court held, “the Court need not decide when a FCRA cause of action accrues, because Plaintiff expressly agreed to arbitrate all disputes, ‘including but not limited to those arising out of federal and state statutes and local ordinances, such as…the Fair Credit Reporting Act’ [emphasis added] at the time she signed the Arbitration Agreement. Whether Plaintiff knew that any such claim had accrued at that time is irrelevant, because the Agreement is not limited to claims that have not yet accrued.”
The specific detail of including “all disputes” and then specifically mentioning that claims under the FCRA were included was persuasive to the Court and serves as a good reminder for us all to take care when drafting arbitration agreements.