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Doskocil Manufacturing Co., Inc. v. Nguyen

Court of Appeals of Texas, Second District, Fort Worth

June 29, 2017

DOSKOCIL MANUFACTURING COMPANY, INC. APPELLANT
v.
SANG NGUYEN APPELLEE

         FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO. 153-285325-16

          PANEL: GABRIEL, SUDDERTH, and KERR, JJ.

          MEMORANDUM OPINION [1]

          ELIZABETH KERR JUSTICE

         Appellee Sang Nguyen sued her former employer, Appellant Doskocil Manufacturing Company, Inc., alleging that workplace exposure to hazardous chemicals caused her throat cancer. Doskocil filed an application to compel arbitration based on the "Waiver and Arbitration Agreement" Nguyen signed in 2001. On Nguyen's motion, the trial court set aside the agreement, and it denied Doskocil's arbitration application. For the reasons explained below, we reverse the trial court's orders and remand with instructions to grant Doskocil's arbitration application.[2]

         I. Background

         Doskocil, a pet-products manufacturer, is a nonsubscriber to the Texas Workers' Compensation Act. In 2001, Doskocil established an employee-injury benefit plan-an employee-welfare benefit plan under the Employee Retirement Income Security Act of 1974-to provide nonsubscriber compensation benefits to its employees for accidental, work-related, on-the-job injuries. Under the plan's terms, Doskocil was to pay all operating and benefit costs; participating employees would "make no payments or payroll deductions to be eligible for Plan benefits and pay no deductibles or co-pay amounts."

         To participate in the plan, an employee had to make a written election by signing and agreeing to the terms of a "Waiver and Arbitration Agreement, " which (1) waived the employee's right to sue for personal injuries or death sustained in the course and scope of employment and (2) required the employee and Doskocil to arbitrate all present and future claims and disputes between them, including "any and all claims challenging the validity or enforceability of this Agreement (in whole or in part) or challenging the applicability of this Agreement to a particular dispute or claim."[3] The agreement incorporated the arbitration procedures laid out in the "Doskocil Manufacturing Company, Inc. Employee Injury Benefit Plan Summary Plan Description."[4] That plan summary also had waiver and arbitration provisions similar to those in the agreement and stated that any arbitration hearing would be conducted under the "American Arbitration Association's National Rules for the Resolution of Employment Disputes."

         In 1999, Doskocil hired Nguyen, a Vietnamese immigrant, to work as a pet-toy assembler in its factory. In 2001, she signed the form agreement and checked a box indicating that she agreed to its terms.[5] Both the agreement and the plan summary were in English. But Nguyen could not read, write, or speak English; she could read, write, and speak only Vietnamese. And while Doskocil sometimes provided Vietnamese translators and translations to its Vietnamese-speaking employees, Nguyen claims that she received neither a translator nor a translation with respect to the agreement.

         In fall 2014, Nguyen was diagnosed with throat cancer and had surgery to remove her teeth and part of her tongue. Because of her illness, she stopped working at Doskocil in October 2014. In May 2016, Nguyen sued Doskocil for negligence, gross negligence, fraud, and civil conspiracy, claiming that exposure to the chemicals Doskocil had used in the manufacturing process had caused her cancer.

         Doskocil answered and filed an application for arbitration. Nguyen then moved to set aside the agreement, arguing that because she did not read or speak English, she did not knowingly or voluntarily enter into that agreement and that it was thus invalid, unconscionable, and unenforceable. She also alleged that the agreement was invalid, unconscionable, and unenforceable because it violated labor code section 406.033. See Tex. Lab. Code Ann. § 406.033(e)-(g) (West 2015) (restricting an employee's ability to waive actions against her nonsubscriber employer to recover damages for personal injury and death sustained in the course and scope of employment).[6] Nguyen further argued that the agreement was illusory and not supported by valid consideration or, alternatively, that the consideration had failed.

         Doskocil responded that under the Federal Arbitration Act, the agreement's terms, and the plan summary's incorporation of the AAA employment-arbitration rules, it fell to the arbitrator, not the trial court, to decide arbitrability. But, Doskocil argued, if the court were to reach the arbitrability issues, the agreement was valid and enforceable.

         After an evidentiary hearing at which Nguyen testified through a translator, the trial court issued a letter ruling stating that based on the supreme court's holding in In re Morgan Stanley, 293 S.W.3d 182 (Tex. 2009), the trial court-as opposed to the arbitrator-should decide the arbitrability issues. The trial court then determined that because Nguyen did not read or speak English, she did not understand the agreement. Thus, the trial court saw no "clear and unmistakable" evidence that Nguyen intended to arbitrate arbitrability issues. On those bases, the trial court granted Nguyen's motion to set aside the agreement and denied Doskocil's arbitration application.

         Doskocil has appealed and raises four issues: (1) the trial court's order granting Nguyen's motion to set aside the agreement is void because the motion was filed and the order was signed during the pendency of a statutorily imposed stay;[7] (2) the trial court erred by ruling on arbitrability issues, which both the agreement and the plan summary delegated to the arbitrator; (3) the trial court erred by reaching the delegation clauses' enforceability; and (4) the trial court erred by not compelling arbitration because the agreement is enforceable and Nguyen's claims are within the arbitration provision's scope.

          II. Standard of Review

         We review a trial court's order denying arbitration for an abuse of discretion. See In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding); Cleveland Constr., Inc. v. Levco Constr., Inc., 359 S.W.3d 843, 851-52 (Tex. App.-Houston [1st Dist.] 2012, pet. dism'd) (explaining standards of review for arbitration appeals). Under this standard, we review the trial court's legal determinations de novo and defer to the trial court's factual determinations if they are supported by the evidence. Labatt Food Serv., 279 S.W.3d at 643; Cleveland Constr. Inc., 359 S.W.3d at 851-52. Because no findings of fact or conclusions of law were filed, [8] we must uphold the trial court's decision if there is sufficient evidence to support it on any legal theory asserted. Shamrock Foods Co. v. Munn & Assocs., Ltd., 392 S.W.3d 839, 844 (Tex. App.-Texarkana 2013, no pet.).

         III. ...


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