Texas Court Directs Trial Court to Permit Limited Discovery Regarding Alleged Arbitration Agreement in Employment Discrimination Case

Arbitration agreements have become increasingly popular over the past several years. In the case of arbitration agreements pertaining to employment law issues, such as a Dallas employment discrimination claim, an arbitration agreement is much more likely to have been drafted by the employer (or its legal representatives) than by the employee.

Thus, an employee may have the belief that arbitration will unfairly favor the employer and that the employee would be “better off” to go to trial rather than have his or her claims decided by an arbitrator. In such a situation, the employee may seek to avoid the terms of an arbitration contract if at all possible.

Facts of the Case

In a recent case, the real party in interest was the plaintiff in a lawsuit accusing the defendant employer of employment discrimination and retaliation in violation of the Texas Labor Code. The defendant sought to compel arbitration of the plaintiff’s claim, relying on an arbitration agreement that was allegedly electronically signed by the plaintiff. The defendant’s human resource generalist signed an affidavit supporting the defendant’s motion, attaching the arbitration agreement and related documents.

The plaintiff’s attorney filed a notice of deposition for the human resource generalist. The defendant replied by filing a motion to compel arbitration and to quash the deposition notice. The plaintiff then filed a motion to compel pre-arbitration discovery pursuant to Texas Civil Practice and Remedies Code § 171.086(a). The trial court granted the plaintiff’s motion and denied the defendant’s motion. The defendant filed a writ of mandamus, challenging the plaintiff’s right to pre-arbitration discovery.

The Court’s Decision

The Court of Appeals for the Eighth District of Texas conditionally granted mandamus relief. The trial court was directed to vacate its orders compelling the deposition and denying the motion to quash the deposition notice. The trial court was to retain discretion over limited discovery as to the specific issues identified in the § 171.086(a) motion. In the event that the plaintiff did not file a motion under this section establishing that she was entitled to pre-arbitration discovery – or should she fail to present evidence sufficient to entitle her to a hearing – the trial court was ordered to summarily rule on the motion to compel arbitration.

Under Texas law, pre-arbitration discovery is authorized when a trial court cannot fairly and properly make its decision on a motion to compel arbitration because it lacks sufficient information regarding the scope of an arbitration provision or other issue of arbitrability. However, this discovery does not go so far as to reach the merits of the underlying controversy.

Dallas Employment Law Defense Attorneys

If you are facing an accusation of employment discrimination and/or retaliation, you should talk to an attorney experienced in defending such claims. At Key Harrington Barnes, our seasoned Dallas discrimination defense lawyers will be glad to schedule an appointment to discuss your case with you. To schedule a time to get started on defending your case, call us now at 214-615-7925.

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