United States District Court, S.D. Texas, Corpus Christi Division
ORDER SUBMITTING THE MOTION TO COMPEL ARBITRATION TO
A JURY TRIAL ON THE FACT QUESTION OF THE EXISTENCE OF AN
GONZALES RAMOS UNITED STATES DISTRICT JUDGE.
Gilbert Galan, Jr. (Galan) sued his employers, Valero
Services, Inc. and Valero Energy Corporation (jointly Valero),
for violations of the Fair Labor Standards Act (FLSA), 29
U.S.C. § 216(b). He alleges that Valero did not pay him
for all hours worked and did not pay required overtime
premiums. Galan has filed a motion for leave to amend his
complaint to transform this individual action into a
collective action. D.E. 10. He has further filed a motion for
class certification and expedited discovery in connection
with the class certification request. D.E. 28.
pending before the Court is Valero's “Motion to
Compel Arbitration of Plaintiff's Claims and to Dismiss
Litigation” (D.E. 11). Valero asserts that Galan agreed
to arbitrate any cause of action related to his employment,
including FLSA claims. The Fifth Circuit has held that the
Court must address arbitration issues prior to any request
regarding collective action certification. Reyna v.
Int'l Bank of Commerce, 839 F.3d 373, 376 (5th Cir.
2016). For the reasons set out below, the Court FINDS that
the parties have raised a disputed issue of material fact as
to whether an arbitration agreement exists between them and
ORDERS this fact question to be submitted for jury trial.
hired Galan on March 15, 1994. At that time, Valero did not
have any arbitration agreement with its employees. However,
Valero purchased Ultramar Diamond Shamrock, Inc. (UDS) in
January 2002, and in the merger integration, adopted
UDS's arbitration model. The result was called
“Dialogue - the Valero Dispute Resolution
Program” (Dialogue), effective June 1, 2002.
D.E. 11-1, p. 10. Dialogue is a multi-step set of
options for handling work-related conflicts, including open
communication, internal conferences, mediation, and
arbitration. D.E. 11-1. Mandatory arbitration is the last
step in the dispute resolution plan.
to the Affidavit of Kim Griffin, Director Refinery HR, she
implemented the dispute resolution program when she was
Valero's Dialogue Manager between January 2002 and
January 2004. D.E. 11-1, p. 2. It is undisputed that
Valero did not get a signed arbitration agreement from Galan.
Rather, Valero asserts that its employees were given notice
of Dialogue by five other measures: a mailed
brochure and letter; information on the Valero intranet
portal; meetings; posters; and its Employee Guide. Valero
claims that by continuing to work for Valero after those
measures were put in place, the employees consented to the
arbitration provisions of Dialogue.
Mailed Brochure and Letter
claims to have mailed copies of a Dialogue brochure
to the current address of each employee, including Galan
(D.E. 11-2, p. 14), containing a letter from Bill Greehey,
Chairman and Chief Executive Officer. While Griffin attests that
she supervised the mailing, including the generation of
appropriate employee addresses, she does not affirmatively
state that the envelopes contained pre-paid
postage. However, she does state that the item
addressed to Galan had Valero's return address on it and
it was not returned by the Post Office as undeliverable.
Id. The letter, published on the third page of the
This program will go into effect on June 1, 2002 for all
nonunion employees. It is required as a condition
of employment and will eliminate the lengthy
and difficult process of having disputes escalate to the
point where a judge and jury are needed to resolve claims.
With Dialogue, disputes are resolved by a neutral
professional arbitrator. Dialogue Advisors in our Corporate
Human Resources Department will also be available to assist
you as neutral facilitators of this process.
This brochure contains both a summary of the program and a
more detailed statement of its terms and conditions.
Please carefully review these materials and all
of the terms that you will be required to
D.E. 11-1, p. 10 (emphasis added). The following page of the
Dialogue brochure contains this notice:
ATTENTION ALL EMPLOYEES
If an employee accepts or continues employment
with Valero, both the employee and Valero agree to all
provisions of Dialogue, the Valero Dispute Resolution
Program (also referred to as Dialogue or the
Program). This includes the requirement that any legal
dispute not resolved through other Options, as discussed in
this summary, be submitted to final and binding
arbitration rather than through the courts or to a
jury. This agreement covers any dispute with the Company or
its employees, such as personal injury claims or claims of
discrimination based on race, national origin, gender,
religion, age or disability or claims under any federal or
state statute, as well as claims under any Valero benefit
plan and the Work Injury Program.
This Program applies to any workplace dispute, regardless
of when it arises, including disputes that arise or are
asserted after an employee leaves the Company.
D.E. 11-1, p. 11 (emphasis added). A similar notice has
accompanied each update of Dialogue through the date
of Galan's termination. D.E. 11-4, p. 25.
does not recall ever being told that his continued employment
constituted consent to arbitration. D.E. 18-1. Furthermore,
if he were ever threatened with termination for refusal to
consent to arbitration, he would remember it, as that would
be the only reason he would agree to it. Id. Galan
attests that he never received a copy of the
Dialogue brochure or its CEO letter in the mail.
Id. Yet he does not deny that the address Valero
used for him was his correct mailing address at the time of
the 2002 implementation mailout. Id. He further
admits to having received other mail from Valero.
Human Resources and Intranet Portal Links
addition to the mailout, Griffin testified that current
versions of the Dialogue plan are maintained in hard
copy in its human resources offices and in a digital version
on Valero's intranet portal.
The Dialogue Plan has undergone various nonsubstantive
revisions since 2002, particularly updating the introductory
letter. Attached to this Affidavit as Exhibit A-5 is a true
and correct copy of the most recent version of the Dialogue
Plan, which was effective at the time Plaintiff's
employment ended. Employees were notified of that revised
Dialogue Plan through Valero's intranet portal. Valero
has used that intranet portal to communicate with employees
about human resources manuals, policies, forms, paystub
information, etc. since mid-1999. Employees have daily access
to the portal, are notified when new information becomes
available, and are expected to review the policies and
procedures posted on the company's intranet. Employees
are expected and were expected, throughout the time of
Plaintiff's employment, to be aware of updated and
revised policies and procedures on the company's
intranet, per the Employee Guide.
D.E. 11-1, p. 4. This explanation and the exhibits
accompanying the motion to compel arbitration do not detail
any form of notification of Dialogue and its
arbitration agreement through the human resources offices or
the intranet portal other than a general expectation that
employees remain aware of evolving company policies as
instructed in the Employee Guide.
to Manuel Hofilena, Valero's Senior Manager Software
Development Engineer, information regarding Dialogue
was posted on Valero's intranet portal for human
resources materials on May 17, 2010. D.E. 20-1. Hofilena
describes where the links for information are and that the
portal contains an overview and a copy of the brochure.
link appears innocuously among a number of other “Quick
Links, ” with no special emphasis. In contrast, the
link for the Substance Abuse Program appears in red font and
the Employee Assistance Program appears in black font,
whereas the other 24 links on that side of the web page are
all blue. The Dialogue link is 10th in a list of 16
close-set topics. It does not appear in the more spacious
list of HR News and Resources, which includes the request,
“Please check regularly for news and updates.”
D.E. 20-1, p. 6.
in Hofilena's affidavit describes how employees were
notified of the importance of reviewing the Dialogue
information or that they were specifically directed to access
Dialogue information on the portal. Neither does
Hofilena offer evidence that Galan actually accessed the
Dialogue links he describes.
admits to using the portal for other purposes, including
rules related to sick leave, employee benefits, and how much
his paycheck would be. D.E. 18-1. In other words, he knew how
to find information that he needed. However, he attests that
he did not know what Dialogue was and had no reason
to investigate it. Id. He neither knew that he
needed it nor that Valero required it.
testified that she directed informational meetings on or
about April 17, 2002, for all employees. D.E. 11-1. Those
meetings were designed to explain the Dialogue plan.
Id. Griffin does not state how employees were
notified of the scheduling or content of the meetings or any
requirement that they attend. While all employees, including
Galan, were required to attend, Griffin does not attest that
Galan did attend and she does not supply any sign-in sheet or
other proof to that effect. Id. Galan denies having
any knowledge of such a meeting and attests that he did not
attend one. Rather, the only Valero meetings he attended were
safety or refinery education meetings, neither of which
addressed Dialogue or arbitration. D.E. 18-1.
to Griffin, Valero placed posters regarding Dialogue
at seven work locations throughout the refinery where Galan
worked and elsewhere. D.E. 11-1, 11-2, p. 17. The
photographic example of such a poster shows it to be crowded
by a collage of partially overlapping posters and notices.
D.E. 20-2. It bears the title “Dialogue” and
subtitle “The Valero Dispute Resolution Program.”
However, its only reference to arbitration appears in the
last of five bullet points under the smaller heading
“What is Dialogue?” D.E. 20-1.
the poster touts Dialogue as building on an open
communications policy, encouraging teamwork, providing fair
treatment in an established dispute resolution method, and
promoting flexible options for resolving disputes
“depending upon whether they are non-legal or legal
issues.” Then it states, “It provides a
confidential, binding arbitration hearing with the same legal
remedies in a less intimidating setting than a long court
battle in state or federal court.” Id. It does
not state anything with respect to conditioning continued
employment on acceptance of its terms.
testifies that he did not frequent any of the areas in which
the posters were placed. D.E. 18-1. While he did visit a few
of those locations on rare occasions, and did view a minimum
wage and internal job posting poster that Valero asserts was
in the vicinity of a Dialogue poster, he did not
specifically notice any Dialogue posters and would
not have understood them to reference arbitration if he had.
Employee Guide and Acknowledgment
modified its Employee Guide, available on the Valero intranet
portal and in hard copy at Human Resources offices, to
reference Dialogue. D.E. 11-2, ...