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September 04, 2015 Practice Points

Arbitration Ordered in Employee Personal Injury Case

By Karl Bayer

Texas’ Eighth District Court of Appeals has ruled that a boot manufacturer may require its workers to arbitrate their workplace injury claims under a provision included in their employment contract.

In Lucchese Boot Co. et al. v. Licon, No. 08-14-00228-CV, Lucchese Boot Co. et al. v. Solano, No. 08-14-00229-CV, and Lucchese Boot Co. et al. v. Rodriguez, No. 08-14-00230-CV, (Tex. App. – El Paso, July 29, 2015), several workers filed personal injury complaints against their employer. Although such cases typically would be subject to the Texas workers’ compensation law, Lucchese is not a subscriber to the program.

In their lawsuits, the workers sought damages for injuries that they suffered on the job. In response, Lucchese unsuccessfully sought to compel arbitration under the terms of the company’s Benefits Injury Plan. When that attempt failed, Lucchese argued that the disputes should be arbitrated under its Problem Resolution Program. The state court denied Lucchese’s motion and the company filed an interlocutory appeal with the Texas appellate court in El Paso.

The appeals court stated that the gateway issue of whether the cases were subject to arbitration was reserved for the courts due to the limited scope of the arbitration provision. Next, the court found that the workers waived their claim that the agreement to arbitrate was illusory since they failed to explain what rendered it so on appeal.

The court of appeals then ruled that an enforceable arbitral agreement existed. The court stated the terms of the Problem Resolution Program were “definite, ascertainable, and not subject to more than one reasonable interpretation.” The court concluded that “both prongs of the arbitration test have been met: an arbitration agreement exists, and the dispute between the parties falls within its ambit.” See Delfingen, 407 S.W.3d at 797. The trial court could not refuse to enforce the arbitration agreement on any defective formation grounds.

The court next held the workers failed to provide evidence that the agreement to arbitrate was unconscionable and rejected the employees’ argument that Lucchese was estopped from seeking to compel arbitration under the Problem Resolution Program because the company unsuccessfully had sought to compel arbitration under the Benefit Plan.

Because Lucchese established that a binding arbitration agreement existed that was not subject to any valid defenses, the court reversed the trial court’s order denying Lucchese’s motion to compel arbitration and remanded the case.

Keywords: alternative dispute resolution, litigation, employer, workers’ compensation, personal injury, compel arbitration

Karl Bayer is founder of Karl Bayer Dispute Resolution in Austin, Texas.

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