Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

National Oil Well Varco, L.P. v. Sadagopan

United States District Court, S.D. Texas, Houston Division

January 3, 2018

NATIONAL OILWELL VARCO, L.P., Plaintiff,
v.
SADEESH SADAGOPAN, MAJED HAMDAN, and KHALED ZANTOUT Defendants.

          MEMORANDUM AND OPINION

          Lee H. Rosenthal Chief United States District Judge

         National Oilwell Varco sued three former employees, alleging that they committed fraud, breach of contract, and breach of fiduciary duties by causing NOV to enter into inflated contracts that gave them kickbacks and handsome profits. (Docket Entry No. 97). The defendants allegedly conspired with a former coworker, FM, who is not a party to this case. FM had an employment contract that required any disputes with NOV to be resolved in arbitration. The defendants did not have contracts with NOV that contained arbitration clauses. FM timely invoked the arbitration clause in his employment contract and began confidential arbitration proceedings.

         Since them, the defendants have filed motions challenging this court's personal jurisdiction over them and seeking dismissal or transfer under forum non conveniens. The parties engaged in, and filed motions contesting, discovery targeted to the threshold issues. The court found that it had jurisdiction over the three former employees and that venue was proper in this district. (Docket Entry No. 77).

         Two of the former employees, Majed Hamdan and Khaled Zantout, have, with new counsel, recently decided that they are entitled to arbitrate rather than litigate the claims NOV asserts against them. (Docket Entry No. 109). The third former employee, Sadeesh Sadagopan, has moved to join the motion to dismiss or stay in favor of arbitration. (Docket Entry No. 110). His motion to join is granted. The defendants assert that although they are not parties to the contract between NOV and FM that contained the arbitration clause, NOV's claims against them are so intertwined with the claims against FM that the doctrine of intertwined-claims equitable estoppel entitles them to compel NOV to arbitrate. (Docket Entry No. 109 at 8-13). NOV opposes dismissal or stay in favor of arbitration. (Docket Entry No. 111).

         The motion and response, the record, and the applicable law lead the court to conclude that it, rather than an arbitrator, must decide whether these nonsignatories can compel a signatory to an arbitration contract that they are not parties to; that these nonsignatories cannot use equitable estoppel to compel NOV to arbitrate claims it did not agree to resolve against these parties in that forum; and that the employees' litigation conduct waived any right to invoke arbitration they may have had. The motion to dismiss or stay in favor of arbitration is therefore denied. (Docket Entry No. 109). The reasons are set out below.

         I. The Arbitration Provisions in NOV's Contract with FM

         NOV's employment contract with FM contains several provisions relevant to arbitration.

         In the contract, FM and NOV:

hereby agree that any dispute, controversy, or claim arising out of or relating to this Agreement, the employment relationship between [FM] and [NOV] or the termination thereof or the arbitrability of any controversy or claim, will be finally settled by confidential and binding arbitration . . . conducted in accordance with the Arbitration Rules of the American Arbitration Association.

(Docket Entry No. 109. Ex. 3-A, § 10(a)).

         FM and NOV agreed to be bound by the results of the arbitration between them:

. . . [FM] and NOV agree that this Section 10 has been adopted by [FM] and NOV to rapidly and inexpensively resolve any disputes between them and that this Section 10 will be grounds for dismissal of any court action commenced by either party arising out of or relating to this Agreement, the employment relationship between [FM] and [NOV] or the termination thereof or the arbitrability of any controversy or claim, other than (i) post-arbitration actions by either party seeking to enforce an arbitration award. . . .

Id. at § 10(b). Section 10(c) requires NOV to pay FM for arbitration expenses if the award is in FM's favor; and § 10(d) requires NOV and FM to keep the details of an arbitration proceeding ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.