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Stage Stores, Inc. v. Eufracio

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

August 1, 2019

STAGE STORES, INC., Appellant,

          On appeal from the County Court at Law No. 2 of Hidalgo County, Texas.

          Before Chief Justice Contreras and Justices Benavides and Longoria



         Appellant Stage Stores, Inc. (Stage) challenges the trial court's denial of its motion to compel arbitration in a discrimination suit brought by appellee Joe Eufracio, a former Stage employee. We reverse and remand.

         I. Background

         Eufracio was employed as a "Market Asset Protection Manager" at Stage's department stores in south Texas from 1999 until 2016. According to Stage, upon his hiring, Eufracio signed an "Alternative Dispute Resolution Acknowledgement" form which stated in its entirety as follows:

Notice of Dispute Resolution Program. The Stage Stores Inc. Dispute Resolution Program requires that any dispute between myself and Stage Stores Inc. or its subsidiaries or affiliates (collectively, the "Company"), or claim by either of us against the other, must be resolved through internal Company procedures or through mediation or final and binding arbitration. NO SUCH DISPUTE OR CLAIM CAN BE TAKEN TO COURT OR HEARD BY A JURY. This includes, but is not limited to, any claim or dispute I might have involving a Company officer, director, owner, affiliate, representative, or employee. It also includes, but is not limited to, any claim based upon a failure or refusal to hire. I acknowledge that a copy of the complete Dispute Resolution Program is available to me upon request. I understand and agree that any offer of employment by the Company will be in consideration for and subject to my agreement to be bound by the Dispute Resolution Program which I show by my signature below. If I choose now, or in the future, not to comply with the Dispute Resolution Program or any policy or procedure described in the Employee Handbook, my employment may be terminated. Even if my employment is terminated (voluntarily or involuntarily, for any reason), the Dispute Resolution Program will continue to apply.

(Emphasis in original.)

         In 2015, Eufracio invoked Stage's dispute resolution process by filing an internal complaint alleging that he had been subject to race/national origin and age discrimination. The complaint alleged, among other things, that Eufracio's supervisor had made offensive and racially disparaging remarks to him on multiple occasions. Subsequently, in February 2016, Stage terminated Eufracio's employment, ostensibly due to "poor performance."

         Eufracio filed the instant suit in Hidalgo County Court at Law Number 2 on May 22, 2017, contending that Stage's actions constituted discrimination on the basis of age, race, national origin, and/or disability, in violation of the Texas Commission on Human Rights Act (TCHRA). See Tex. Lab. Code Ann. § 21.051. The petition additionally alleged that Stage unlawfully retaliated against Eufracio by firing him. See id. § 21.055.

         Stage moved to compel arbitration, arguing that Eufracio signed the "Alternative Dispute Resolution Acknowledgement" form in 1999 when he was hired. The motion included a copy of the form which appeared to be signed by Eufracio and was dated January 11, 1999. Stage's motion also included a copy of its Dispute Resolution Program, a 20-page pamphlet which sets forth mandatory procedures for certain claims, including a formal internal review, mediation, and binding arbitration. The document states that "[c]laims for discrimination" are subject to all of those procedures. In response to the motion to compel, Eufracio argued that the arbitration agreement is unenforceable for various reasons, which we categorize as follows: (1) it is illusory due to a lack of consideration; (2) it is procedurally unconscionable; (3) it is "indefinite"; and (4) it "deprives [him] of an equivalent and accessible forum in which to effectively prosecute his claims."

         At a hearing on April 23, 2018, Eufracio testified that he first learned of Stage's Dispute Resolution Program when he was "presented by [his counsel] the documents of the lawsuit." When asked whether the signature on the "Alternative Dispute Resolution Acknowledgement" form was his, Eufracio replied: "It looks to be but it's not." He explained that he never signed the form, and he observed that the form was incomplete because the spaces for "Associate Number," "Date of Hire," and "Store Number" were left blank. Eufracio also denied that he was ever "given" the Dispute Resolution Program pamphlet. Following Eufracio's testimony, his counsel stated to the court: "[I]f I had my preferences on this particular case I would like the opportunity to go to mediation and if it doesn't settle at mediation then at some point arbitration would be discussed and if the Court orders arbitration at that point then so be it."

         Nevertheless, the trial court signed an order denying the motion to compel in its entirety on May 11, 2019, and this interlocutory appeal followed. See Tex. Civ. Prac. & Rem. Code Ann. § 51.016. On July 10, 2018, we abated the appeal to allow the parties to engage in mediation. Because no agreement was reached at mediation, we reinstated the appeal on September 13, 2018.

         II. ...

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