Castelo v. Xceed Fin. Credit Union, 91 Cal. App. 5th 777 (2023)

Elizabeth Castelo sued her former employer Xceed Financial Credit Union for wrongful termination and age discrimination in violation of FEHA.  After the parties stipulated to binding arbitration, the arbitrator granted summary judgment to Xceed based on a release that Castelo signed after she was notified of the termination decision but before her last day on the job.  Castelo argued that the release violated Cal. Civ. Code § 1668, which prohibits pre-dispute releases of liability.  Although Xceed provided Castelo with a two-part release (a release of claims through the date of execution and a “Reaffirmation” that Castelo was supposed to sign on her last day of her employment six weeks later), Castelo signed both releases at the same time (i.e., six weeks before her employment ended) and then later contended that her wrongful termination claim was not barred by either release, because that claim “accrued” on the date of her separation, which occurred after the releases were executed.  The arbitrator (the late Hon. Enrique Romero (ret.)) enforced the releases and determined that they were not barred by the statute because they did not have as their purpose the immunization of Xceed from liability for a future violation of law.  The trial court granted Xceed’s petition to confirm the arbitration award and denied Castelo’s petition to vacate.  The Court of Appeal affirmed the trial court’s judgment.