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Alexander Dubose Jefferson & Townsend LLP v. Vance

United States District Court, W.D. Texas, Austin Division

May 22, 2017

ALEXANDER DUBOSE JEFFERSON & TOWNSEND LLP, Plaintiff,
v.
SUSAN VANCE, Defendant.

          ORDER

          ROBERT PITMAN, UNITED STATES DISTRICT JUDGE

         Before the Court in the above-entitled matter is Plaintiff's Motion to Compel Arbitration and to Stay or Dismiss, (Dkt. 24), Defendant's Motion to Permit Discovery, (Dkt. 30), and the responsive filings thereto. Having considered the filings, relevant law, and the entire case file, the Court issues the following Order.

         I. BACKGROUND

         Plaintiff Alexander Dubose Jefferson & Townsend LLP (“Plaintiff” or “ADJT”) is a law firm specializing in appellate representation. (Compl., Dkt. 1, ¶ 7). Defendant Susan Vance (“Defendant” or “Ms. Vance”) was a non-equity partner at ADJT until her employment was terminated on November 16, 2016. (Id. ¶ 1). On February 22, 2017, ADJT filed suit against Ms. Vance pursuant to the Computer Fraud and Abuse Act, the Texas Uniform Trade Secrets Act, and the Texas Theft Liability Act. (Id. ¶¶ 17-30). On March 15, 2017, Ms. Vance filed an Original Answer and Counterclaims, advancing claims for conversion, negligence, breach of contract, and violations of the anti-discrimination and anti-retaliation provisions of Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act. (Answer, Dkt. 13, ¶¶ 95-120).

         ADJT filed the instant motion, which seeks to compel all claims in this matter to arbitration and to stay or dismiss this proceeding, on April 19, 2017. (Mot. Compel, Dkt. 24). On May 3, 2017, Ms. Vance filed a Response and Request for Pre-Arbitration Discovery, contending-among other things-that ADJT “has failed to show the existence of a valid arbitration agreement.” (Vance Resp. Mot. Compel, Dkt. 27, at 1). She subsequently filed a Motion to Permit Discovery, seeking a court order permitting her to conduct “limited pre-arbitration discovery” regarding (1) whether the arbitration provision in question is procedurally unconscionable, is substantively unconscionable, was fraudulently obtained, or rests on an illusory promise; and (2) whether ADJT has waived its right to arbitrate. (Mot. Permit Discovery, Dkt. 30).

         II. LEGAL STANDARDS

         The Federal Arbitration Act (“FAA” or “the Act”) permits an aggrieved party to file a motion to compel arbitration when an opposing party has “failed, neglected, or refused to comply with an arbitration agreement.” 9 U.S.C. § 4; Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991). The Act represents a “liberal federal policy favoring arbitration agreements.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); see also Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002) (stating that the FAA “expresses a strong national policy favoring arbitration of disputes”).

         A court's consideration of a motion to compel arbitration pursuant to the FAA is subject to a two-step inquiry. Webb v. Investacorp, Inc., 89 F.3d 252, 257-258 (5th Cir. 1996). The Court must first determine whether the parties agreed to arbitrate the dispute. Id. at 258 (citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)). That determination involves two questions: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement. Graves v. BP Am., Inc., 568 F.3d 221, 222 (5th Cir. 2009); Webb, 89 F.3d at 258. The Court must then determine whether any legal constraints foreclose arbitration of those claims. Mitsubishi Motors, 473 U.S. at 628; Brown v. Pac. Life Ins. Co., 462 F.3d 384, 396 (5th Cir. 2006).

         Texas contract law governs the inquiry into whether there is a valid agreement to arbitrate between the parties. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995); see also Morrison v. Amway Corp., 517 F.3d 248, 254 (5th Cir. 2008). According to state law, “[a]n employer may enforce an arbitration agreement entered into during an at-will employment relationship if the employer establishes that the employee received notice of its arbitration policy and accepted it.” In re Dillard Dep't Stores, Inc., 198 S.W.3d 778, 780 (Tex. 2006) (citing In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002)). “If the employee receives notice and continues working with the knowledge of the modified employment terms, the employee accepts them as a matter of law.” Id.

         III. DISCUSSION

         The arbitration provision at issue in this case, which the parties refer to as the ADJT Dispute Resolution Program (“the Dispute Resolution Program”), states that it “govern[s] all disputes that may arise between employees and ADJT.” (Dispute Resolution Program, Dkt. 24-1, at 5). The Dispute Resolution Program also states that “[a]ll legal disputes directly or indirectly arising out of or relating to the employment relationship . . . not otherwise resolved through negotiation or mediation, shall be submitted by ADJT or by the employee for final, binding arbitration . . . .” (Id.).

         To evaluate the parties' respective arguments regarding the enforceability of the Dispute Resolution Program, the Court must first consider whether there is a valid agreement to arbitrate between the parties. See Graves, 568 F.3d at 222; Webb, 89 F.3d at 258. Central to that inquiry is whether ADJT has established that Ms. Vance received notice of the arbitration policy and accepted its terms. See In re Dillard, 198 S.W.3d at 780 (Tex. 2006) (citing In re Halliburton, 80 S.W.3d at 568).

         Actual notice can be express or implied. Doe v. Columbia N. Hills Hosp. Subsidiary, L.P., No. 02-16-275-CV, 2017 WL 1089694, at *4 (Tex. App.-Fort Worth Mar. 23, 2017) (no pet. h.). The Court will thus first consider whether ADJT has established that Ms. Vance received express notice; if necessary, it will then turn to whether Ms. Vance received implied notice.

         A. ...


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