Texas Appeals Court Affirms Denial of Motion to Arbitrate Age Discrimination Claim

It is not usual for an employer to ask an employee to sign paperwork as part of the hiring process. Increasingly, an agreement to arbitrate claims such as a Dallas wrongful termination claim may be included in this paperwork.

Of course, disputes can arise with regard to the enforceability of such an agreement.

A recent case illustrates the importance of “dotting the i’s and crossing the t’s” of such paperwork, lest an employee be able to call into question a document’s validity on a technicality.

Facts of the Case

In a recent case, the plaintiff was a former employee of the defendant company. The plaintiff filed suit in the 345th District Court of Travis County, asserting claims for wrongful termination and age discrimination in violation of Chapter 21 of the Texas Labor Code. The case was set for a trial but jury, but the defendant filed a motion to compel arbitration. The plaintiff responded by asserting that the arbitration agreement relied upon by the defendant was invalid because the defendant had not signed it. The trial court denied the defendant’s motion, and it appealed.

The Court’s Decision on Appeal

The Texas Court of Appeals for the Third District affirmed the lower court’s order denying the defendant’s motion to compel arbitration of the plaintiff’s claim. The appellate court began by reviewing Texas contract law. Under Texas law, a binding contract requires several things: an offer, an acceptance, a meeting of the minds, consent by both parties, execution and delivery. According to the court, the issue in the case under review was whether the parties intended that the arbitration agreement be mutual and binding despite the defendant’s failure to execute the document.

The court went on to note that the question of intent is one that can be decided as a matter of law after analyzing the express language of the alleged agreement. According to the court, the contract at issue provided “unambiguous evidence” that the intent of the parties was that both signatures were required as a condition precedent to the enforcement of the agreement. In so holding, the court observed that, although the document in question was written from the employer’s perspective, it repeatedly referred to both parties agreeing to the terms of the contract.

The burden of proving the validity of the agreement was on the defendant, and, it being apparent that both the signatures of the plaintiff and the defendant were required in order for the agreement to be enforceable, the district court did not abuse its discretion in denying the defendant’s motion to compel arbitration.

Discuss an Employment Law Issue with a Dallas Attorney

This case is a cautionary tale of what can happen when all the appropriate paperwork has been prepared but someone neglects to sign a document on behalf of the employer. If you have questions about how to protect your business in today’s litigious environment, call Key Harrington Barnes at 214-615-7925 to set up an appointment with a member of our employment litigation team. We appreciate the opportunity to discuss your concerns with you, and we look forward to meeting your business’s legal needs.

Contact Information