A federal court in Florida held that an employment contract that contains an arbitration agreement does not apply retroactively to injuries sustained two years prior to the formation of the contract.

In Azevedo v. Carnival Corp., No. 08-20518-CIV, 2008 WL 2261195 (S.D. Fla. May 30, 2008), Azevedo was working for Carnival aboard the cruise ship "Celebration," and her employment contract did not contain an arbitration agreement. Azevedo complained of abdominal pain to the Celebration medical staff for ten days before getting an appendectomy at a shoreside hospital in November 2004.

After returning to work in February 2005, Azevedo signed a new employment contract in November 2006 to work on a different cruise ship, the "Elation." The 2006 employment contract did contain an arbitration agreement.

In 2007, Azevedo sued Carnival for inadequate medical care and treatment based on the 2004 incident on the Celebration. Carnival moved to compel arbitration based on the 2006 arbitration agreement, arguing that it should apply retroactively.

The Court denied Carnival's motion to compel arbitration. The Court held that since there was no arbitration agreement between Azevedo and Carnival in 2004, and all of Azevedo's allegations stemmed from the 2004 incident, there was no agreement to arbitrate Azevedo's claims.

Carnival argued that Azevedo's complaint alleged "ongoing misconduct" through 2007 and, as such, the 2006 arbitration agreement should apply retroactively. Carnival pointed to Azevedo's testimony that "since 2004 and through the present date she has been experiencing abdominal pain." Thus, Carnival argued that Azevedo alleged inadequate medical care while she was working aboard the Elation.

The Court rejected Carnival's argument, holding that Azevedo did not allege any misconduct after November 28, 2004, and noting that Azevedo never even mentioned Elation's medical center in her complaint.

Carnival also argued that the broad language of the 2006 agreement justified retroactive application. The Court rejected this argument, as well, holding that the 2006 agreement did not contain any language that rendered its terms retroactive, and that it explicitly provided that it became effective when Azevedo reported to work aboard the Elation.

The Court summarized its holding, noting that "while [Azevedo] has clearly agreed to arbitrate claims that arise out of her employment on the Elation, there is no doubt that [she] did not agree to arbitrate claims that arose out of her employment on the Celebration."