It all depends. If you were actually charged with theft in the first degree, that is a class B felony and no "pre-trial diversion" is available. In King County, however, there is the opportunity to do what is called an "expedited." Typically this requires you to plead guilty to a misdemeanor.
If you were actually charged with theft in the third degree, you may have entered a "pre-diversion." The question you are being asked by the employer is very broad. However, if it was a true pre-trial diversion on a misdemeanor, you were not convicted, didn't plead guilty and this was not a deferred judgment or adjudication. Although I believe you can truthfully answer that question "no," be prepared for the employer out find out about the 1996 case and be prepared to explain why you didn't disclose it.
If you truly entered into and got a dismissal from the diversion program then yes. I think what Len is questioning is whether you actually did a pre-trial diversion on a Theft 1 felony... You might want to follow up with your paperwork from the 1996 case or have an attorney research it so you can answer the question in an informed manner.
Very unlikely you did a pretrial diversion on a theft 1. How much did you steal? That's the easy way to make an educated guess on whether this is theft 3 or 1. But for a complete answer you'll need a defense attorney to review your record.
At your service,