Autozone, Inc. and Autozoners L.L.C. v. Mario Flores ( 2015 )

ACCEPTED
04-15-00307-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
6/23/2015 4:35:06 PM
KEITH HOTTLE
CLERK
NO. 04-15-00307-CV
IN THE COURT OF APPEALS FILED IN
4th COURT OF APPEALS
FOURTH COURT OF APPEALS DISTRICTSAN ANTONIO, TEXAS
SAN ANTONIO, TEXAS 06/23/2015 4:35:06 PM
KEITH E. HOTTLE
*** Clerk
AUTOZONE, INC., AND AUTOZONERS, L.L.C.,
Appellants
V.
MARIO FLORES,
Appellee
***
BRIEF OF APPELLANTS
***
BRETT REYNOLDS & ASSOCIATES, P.C. THE LAW OFFICE OF
Brett T. Reynolds JACQUELINE M. STROH, P.C.
State Bar No. 16795500 Jacqueline M. Stroh
btreynolds@btrlaw.com State Bar No. 00791747
P. Brook Swilley jackie@strohappellate.com
State Bar No. 24041997 10101 Reunion Place, Suite 600
pbswilley@btrlaw.com San Antonio, Texas 78216
1250 N.E. Loop 410, Suite 420 (210) 477-7416
San Antonio, Texas 78209 (210) 477-7466 (telecopier)
(210) 805-9799
(210) 805-9654 (telecopier)
ATTORNEYS FOR APPELLANTS
APPELLANTS RESPECTFULLY REQUEST ORAL ARGUMENT
IDENTITY OF PARTIES AND COUNSEL
In accordance with Texas Rule of Appellate Procedure 38.1(a), Appellants
present the following list of all parties to the order being appealed and their
counsel:
1. Appellants/Defendants Below
AutoZone, Inc.
AutoZoners, L.L.C.
2. Counsel for Appellants
Brett T. Reynolds Trial/Appellate Counsel
P. Brook Swilley
1250 N.E. Loop 410, Suite 420
San Antonio, Texas 78209
Jacqueline M. Stroh Appellate Counsel
The Law Office of Jacqueline M. Stroh, P.C.
10101 Reunion Place, Suite 600
San Antonio, Texas 78216
3. Appellee/Plaintiff Below
Mario Flores
4. Counsel for Appellee
Jaime M. Lynn Trial/Appellate Counsel
Kiara Martinez
The Carlson Law Firm, P.C.
11606 North Interstate Highway 35
Austin, Texas 78753
-and-
400 West Jasper Road
Killeen, Texas 76542
ii
TABLE OF CONTENTS
Page
IDENTITY OF PARTIES AND COUNSEL ........................................................... ii
TABLE OF CONTENTS ......................................................................................... iii
INDEX OF AUTHORITIES................................................................................... vii
STATEMENT OF THE CASE ................................................................................ xv
STATEMENT REGARDING JURISDICTION ....................................................xvi
STATEMENT REGARDING ORAL ARGUMENT .......................................... xvii
ISSUE PRESENTED ........................................................................................... xviii
Issue No. 1:
Whether the AutoZone Appellants are entitled to have the arbitration
provisions contained in the parties’ agreement enforced pursuant to
the Federal Arbitration Act, resulting in a referral of this matter to
arbitration.
The arbitration agreement expressly invokes application of the Federal
Arbitration Act, as well as AutoZone’s involvement in interstate
commerce. That agreement is broad in scope – applying to claims for
personal injury – and reserves to the arbitrator all questions regarding
the interpretation, enforcement, and scope of the agreement.
Regardless, Appellee Flores’ claims fall well within the agreement’s
scope; and Flores’ only defenses – based on section 1’s exemption,
the Texas Labor Code, and procedural unconscionability – have been
rejected by Texas and federal courts alike ................................................ xviii
STATEMENT OF FACTS ........................................................................................ 1
SUMMARY OF THE ARGUMENT ........................................................................ 3
ARGUMENT AND AUTHORITIES ........................................................................ 6
iii
I. This Court Reviews the Trial Court’s Ruling De Novo ........................ 6
II. The AutoZone Appellants Established the Existence of a Valid
Arbitration Agreement Enforceable under the Federal
Arbitration Act ...................................................................................... 8
A. The Parties Entered into a Binding Arbitration
Agreement to which the Federal Arbitration Act Applies .......... 9
1. The Plan Expressly Invokes the FAA ............................ 10
2. The Plan Involves Interstate Commerce......................... 11
B. The Arbitration Agreement Encompasses Mario Flores’
Claims; Regardless, the Issue Is One for the Arbitrator to
Decide ....................................................................................... 14
1. The Arbitration Agreement Reserves for the
Arbitrator’s Decision the Issue of Whether Flores’
Claims Fall within Its Scope ........................................... 14
2. Even if the Scope of the Arbitration Agreement Is
an Issue for Judicial Determination, Flores’
Personal Injury Claims Fall Well within the
Agreement’s Terms ........................................................ 16
III. None of Appellee Flores’ Efforts to Thwart the Arbitration
Agreement Have Merit ........................................................................ 17
A. Courts Recognize That the Federal Arbitration Act’s
Exception for “Employment” Agreements Applies Solely
to Transportation Workers, Unlike Appellee Flores................. 18
1. Flores Cannot Argue an Exception to the FAA
When He Expressly Agreed to the FAA’s
Application ..................................................................... 18
2. Any Question Regarding Interpretation or
Enforcement of the Agreement Must Be Decided
by the Arbitrator ............................................................. 19
iv
3. Regardless, the Supreme Court Has Limited the
Exception to Transportation Workers Actually
Engaged in the Interstate Transport of Goods ................ 19
B. The Texas Workers’ Compensation Act Does Not
Preclude Enforcement of the Plan’s Arbitration
Provisions, Nor Could It in Light of the Federal
Arbitration Act’s Supremacy .................................................... 21
1. The Supreme Court of Texas Has Rejected This
Exact Argument, and Flores Conceded as Much
Below .............................................................................. 22
2. To the Extent Section 406.003(e) Would Preclude
Arbitration, the FAA Would Preempt It ......................... 23
C. Appellee Flores Failed to Demonstrate Procedural
Unconscionability ..................................................................... 24
1. Appellee Flores Attacked the Parties’ Agreement
as a Whole – an Argument That the Supreme
Court of the United States Has Held Must Be
Resolved by the Arbitrator ............................................. 24
2. Even Assuming a Court Could Decide the Issue,
This Court Has Held That Illiteracy Is No Defense
to Arbitration .................................................................. 28
a. Flores’ “Proof” Constitutes Barred Parol
Evidence and, Thus, Cannot Be Considered
by the Court .......................................................... 28
b. Texas Law Does Not Recognize an Inability
to Read English as a Defense to Contract –
Even with an Unconscionability Label – and
Flores Offered No Supportive Evidence in
Any Event ............................................................. 29
v
i. Flores Offered No Proof of an
Inability to Speak, Read, or Write
English ....................................................... 29
ii. Texas Does Not Recognize Illiteracy
as a Defense to Contract Generally or
as a Defense to Arbitration
Specifically................................................. 31
iii. This Court Has Rejected Flores’
Authority, and Flores Offered No
Evidence of Fraud on AutoZone’s
Part Regardless........................................... 35
PRAYER .................................................................................................................. 38
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME
LIMITATION ............................................................................................ 39
CERTIFICATE OF SERVICE ................................................................................ 40
APPENDIX ............................................................................................. (A-1 to A-3)
Order Denying “Defendants’ Motion to
Compel/Enforce Arbitration” (04/27/15) ........................................... A-1
Federal Arbitration Act................................................................................... A-2
Excerpts from the AutoZone Texas Occupational
Injury Benefit Plan .............................................................................. A-3
vi
INDEX OF AUTHORITIES
Page
CASES
Allied-Bruce Terminix Cos., Inc. v. Dobson,
513 U.S. 265 (1995) ..............................................................................................11
Associated Employers Lloyds v. Howard,
156 Tex. 277, 294 S.W.2d 706 (1956) .................................................................31
Brand FX, LLC v. Rhine,
458 S.W.3d 195 (Tex. App. – Fort Worth 2015, no pet.).......................................7
Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006) ..............................................................................................25
BWI Cos., Inc. v. Beck,
910 S.W.2d 620 (Tex. App. – Austin 1995, orig. proceeding) ..................... 12, 20
Cantella & Co. v. Goodwin,
924 S.W.2d 943 (Tex. 1996) (orig. proceeding) ......................................... 8, 9, 16
Cintas Corp. v. Quevedo,
No. 04-11-00142-CV, 2012 WL 1940642
(Tex. App. – San Antonio, May 30, 2012, no pet.) (mem. op.) ...........................29
Circuit City Stores, Inc. v. Adams,
532 U.S. 105 (2001) ................................................................................... 9, 19, 20
City of San Antonio v. International Ass’n of Fire Fighters, Local 624,
Nos. 04-12-00783-CV and 04-13-00109-CV, 2013 WL 5508408 (Tex.
App. – San Antonio, Oct. 2, 2013, no pet., orig. proceeding) (mem. op.) .......7, 13
De Villagomez v. First Nat’l Bank,
No. 13-04-00367-CV, 2005 WL 1832800
(Tex. App. – Corpus Christi, Aug. 4, 2005, pet. denied) (mem. op.) ...................32
EEOC v. Waffle House, Inc.,
534 U.S. 279 (2002) ..............................................................................................19
Elkins v. Stotts-Brown,
103 S.W.3d 664 (Tex. App. – Dallas 2003, no pet.) ............................................31
vii
Ernst & Young LLP v. Martin,
278 S.W.3d 497 (Tex. App. – Houston [14th Dist.] 2009,
no pet., orig. proceeding) ......................................................................................15
Estate of Benitez v. Sears, Roebuck & Co.,
No. 3:13-CV-0468-D, 2013 WL 4223875 (N.D. Tex., Aug. 14, 2013) .. 27, 37, 38
EZ Pawn Corp. v. Mancias,
934 S.W.2d 87 (Tex. 1996) (orig. proceeding) (per curiam) ...............................24
Fleetwood Enters., Inc. v. Gaskamp,
280 F.3d 1069 (5th Cir. 2002) ..............................................................................28
Forest Oil Corp. v. McAllen,
268 S.W.3d 51 (Tex. 2008)...................................................................................15
Glassman v. Goodfriend,
347 S.W.3d 772 (Tex. App. – Houston [14th Dist. 2011, pet. denied)
(en banc)................................................................................................................37
Grapevine Excavation, Inc. v. Maryland Lloyds,
35 S.W.3d 1 (Tex. 2000).......................................................................................37
Green v. SuperShuttle Int’l, Inc.,
653 F.3d 766 (8th Cir. 2011) ................................................................................19
Henry v. Gonzalez,
18 S.W.3d 684 (Tex. App. – San Antonio 2000,
pet. dism’d, orig. proceeding) ...............................................................................26
IHS Acquisition No. 171, Inc. v. Beatty-Ortiz,
387 S.W.3d 799 (Tex. App. – El Paso 2012, no pet.) ..........................................15
In re AdvancePCS Health, L.P.,
172 S.W.3d 603 (Tex. 2005) (orig. proceeding) ........................................... 10, 21
In re Alamo Lumber Co.,
23 S.W.3d 577 (Tex. App. – San Antonio 2000, orig. proceeding) .....................10
In re Big 8 Food Stores, Ltd.,
166 S.W.3d 869 (Tex. App. – El Paso 2005, orig. proceeding) .............. 12, 13, 32
viii
In re Border Steel, Inc.,
229 S.W.3d 825 (Tex. App. – El Paso 2007, orig. proceeding) .............. 23, 24, 34
In re Dallas Peterbilt, Ltd., L.L.P.,
196 S.W.3d 161 (Tex. 2006) (orig. proceeding) ..................................................21
In re Dillard Dep’t Stores,
198 S.W.3d 778 (Tex. 2006) (orig. proceeding) ..................................................21
In re FirstMerit Bank, N.A.,
52 S.W.3d 749 (Tex. 2001) (orig. proceeding) ......................................... 7, 17, 26
In re Gardner Zemke Co.,
978 S.W.2d 624 (Tex. App. – El Paso 1998, orig. proceeding) ...........................13
In re Golden Peanut Co., LLC,
298 S.W.3d 629 (Tex. 2009) (orig. proceeding) (per curiam) ...................... 22, 24
In re H.E. Butt Grocery Co.,
17 S.W.3d 360 (Tex. App. – Houston [14th Dist.] 2000, orig. proceeding) . 17, 29
In re Halliburton Co.,
80 S.W.3d 566 (Tex. 2002) (orig. proceeding) ................................... 8, 21, 24, 29
In re HEB Grocery Co., L.P.,
299 S.W.3d 393 (Tex. App. – Corpus Christi 2009, orig. proceeding)......... 10, 16
In re Jim Walter Homes, Inc.,
207 S.W.3d 888 (Tex. App. – Houston 14th Dist.] 2006, orig. proceeding) .......11
In re Kellogg Brown & Root,
80 S.W.3d 611 (Tex. App. – Houston [1st Dist.] 2002, orig. proceeding) ... 10, 11
In re L & L Kempwood Assocs., L.P.,
9 S.W.3d 125 (Tex. 1999) (orig. proceeding) (per curiam) .............................8, 12
In re Labatt Food Serv., L.P.,
279 S.W.3d 640 (Tex. 2009) (orig. proceeding) ....................................................7
In re Ledet,
No. 04-04-00411-CV, 2004 WL 2945699 (Tex. App. –
San Antonio, Dec. 22, 2004, orig. proceeding) (mem. op.) ........ 33, 34, 36, 37, 38
ix
In re Lyon Fin. Servs.,
257 S.W.3d 228 (Tex. 2008) (orig. proceeding) ..................................................24
In re Macy’s Tex., Inc.,
291 S.W.3d 418 (Tex. 2009) (orig. proceeding) (per curiam) .............................21
In re McKinney,
167 S.W.3d 833 (Tex. 2005) (orig. proceeding) ..................................................21
In re Merrill Lynch Trust Co. FSB,
123 S.W.3d 549 (Tex. App. – San Antonio 2003, orig. proceeding) ...................12
In re MP Ventures of So. Tex., Ltd.,
276 S.W.3d 524 (Tex. App. – San Antonio 2008, orig. proceeding) ...................23
In re Nexion Health at Humble, Inc.,
173 S.W.3d 67 (Tex. 2005) (orig. proceeding) ....................................................13
In re Oakwood Mobile Homes, Inc.,
987 S.W.2d 571 (Tex. 1999) (orig. proceeding),
abrogated in part on other grounds in In re Halliburton Co.,
80 S.W.3d 566 (Tex. 2002) (orig. proceeding) .....................................................8
In re Odyssey Healthcare, Inc.,
310 S.W.3d 419 (Tex. 2010) (orig. proceeding) ..................................................22
In re Olshan Foundation Repair Co., LLC,
328 S.W.3d 883 (Tex. 2010) (orig. proceeding) ........................................... 24, 26
In re People’s Choice Home Loan, Inc.,
225 S.W.3d 35 (Tex. App. – El Paso 2005, orig. proceeding) .............................10
In re Poly-Am., L.P.,
262 S.W.3d 337 (Tex. 2008) (orig. proceeding) ....................................................7
In re Rangel,
45 S.W.3d 783 (Tex. App. – Waco 2001, orig. proceeding) ................................34
In re ReadyOne Indus.,
294 S.W.3d 764 (Tex. App. – El Paso 2009, orig. proceeding) ...........................10
In re Rubiola,
334 S.W.3d 220 (Tex. 2011) (orig. proceeding) ..............................................8, 16
x
In re Swift Transp. Co.,
311 S.W.3d 484 (Tex. App. – El Paso 2009, orig. proceeding) .................... 20, 21
In re Turner Bros. Trucking Co.,
8 S.W.3d 370 (Tex. App. – Texarkana 1999, orig. proceeding) ............. 23, 35, 36
Indemnity Ins. Co. of N. Am. v. W.L. Macatee & Sons,
129 Tex. 166, 101 S.W.2d 553 (1937) .................................................................31
J.M. Davidson v. Webster,
128 S.W.3d 223 (Tex. 2003) ................................................................................17
Jack B. Anglin Co., Inc. v. Tipps,
842 S.W.2d 266 (Tex. 1992) (orig. proceeding) ..............................................9, 23
Kuper v. Schmidt,
161 Tex. 189, 338 S.W.2d 948 (1960) .................................................................29
Lopez v. Garbage Man, Inc.,
No. 12-08-00384-CV, 2011 WL 1259523
(Tex. App. – Tyler, Mar. 31, 2011, no pet.) (mem. op.).......................................32
Lost Creek Mun. Utility Dist. v. Travis Indus. Painters, Inc.,
827 S.W.2d 103 (Tex. App. – Austin 1992, writ denied).....................................12
Madeksho v. Abraham, Watkins, Nichols & Friend,
57 S.W.3d 448 (Tex. App. – Houston [14th Dist.] 2001, pet. denied) .................31
Manahan v. Meyer,
862 S.W.2d 130 (Tex. App. – Houston [1st Dist.] 1993, writ denied).................14
Medina v. Tate,
438 S.W.3d 583 (Tex. App. – Houston [1st Dist.] 2013, no pet.) ........................37
MobileVision Imaging Servs., L.L.C. v. LifeCare Hosps. of N. Tex., L.P.,
260 S.W.3d 561 (Tex. App. – Dallas 2008, no pet.) ............................................37
Nguyen Ngoc Giao v. Smith & Lamm, P.C.,
714 S.W.2d 144 (Tex. App. – Houston [1st Dist.] 1986, no writ) .......................33
Penrol Drilling Corp. v. Williams,
868 S.W.2d 294 (Tex. 1993) ................................................................................36
xi
Perry Homes v. Cull,
258 S.W.3d 580 (Tex. 2008) ................................................................................26
Petroleum Analyzer Co. LP v. Franek Olstowki,
No. 01-09-00076-CV, 2010 WL 2789016
(Tex. App. – Houston [1st Dist.], Jul. 15, 2010, no pet.) (mem. op.) ..................13
Prevot v. Phillips Petroleum Co.,
133 F. Supp. 2d 937 (S.D. Tex. 2001) ....................................................................35
Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
388 U.S. 395 (1966) ....................................................................................... 25, 26
Prudential Securities, Inc. v. Marshall,
909 S.W.2d 896 (Tex. 1995) (orig. proceeding) ..................................................16
ReadyOne Indus., Inc. v. Flores,
___ S.W.3d ___, 2014 WL 6982275
(Tex. App. – El Paso, Dec. 10, 2014, pet. filed) ...................................................34
Rent-A-Center, West, Inc. v. Jackson,
561 U.S. 63 (2010) ................................................................................... 15, 25, 26
Seven Hills Commercial, LLC v. Mirabal Custom Homes, Inc.,
442 S.W.3d 706 (Tex. App. – Dallas 2014, pet. denied)......................................15
Shearson/American Express, Inc. v. McMahon,
482 U.S. 220 (1987) ................................................................................................9
Southland Corp. v. Keating,
465 U.S. 1 (1984) ..................................................................................................23
State v. Shumake,
199 S.W.3d 279 (Tex. 2006) ..................................................................................7
Tamez v. Southwestern Motor Transport, Inc.,
155 S.W.3d 564 (Tex. App. – San Antonio 2004, no pet.) ........................... 32, 38
TMI, Inc. v. Brooks,
225 S.W.3d 783 (Tex. App. – Houston [14th Dist.] 2007,
pet. denied, orig. proceeding) ...............................................................................30
xii
United States v. Lauersen,
No. 98 CR. 1134(WHP), 1999 WL 637237
(S.D.N.Y., Aug. 20, 1999) (not designated for publication) ................................14
Valdez v. Autozone, Inc.,
No. H-14-3386, 2015 WL 1099700
(S.D. Tex., Feb. 17, 2015) (not designated for publication).................................15
Vera v. North Star Dodge Sales, Inc.,
989 S.W.2d 13 (Tex. App. – San Antonio 1998, no pet.) ........... 31, 33, 36, 37, 38
Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior
Univ.,
489 U.S. 468 (1989) ..............................................................................................10
White-Weld & Co., Inc. v. Mosser,
587 S.W.2d 485 (Tex.Civ.App. – Dallas 1979, writ ref’d n.r.e.) .........................20
CONSTITUTIONAL PROVISIONS
U.S. CONST. art. VI, cl.2 ..........................................................................................23
STATUTES
FEDERAL ARBITRATION ACT, 9 U.S.C. § 1................... iii, xv, xvii, 17, 18, 19, 20, 21
FEDERAL ARBITRATION ACT, 9 U.S.C. § 2.................................................... 8, 11, 20
FEDERAL ARBITRATION ACT, 9 U.S.C. § 3.................................................................8
FEDERAL ARBITRATION ACT, 9 U.S.C. § 4.................................................................8
FEDERAL ARBITRATION ACT, 9 U.S.C. § 16.............................................................xv
FEDERAL ARBITRATION ACT, 9 U.S.C. § 16(a)(1) ...................................................xv
TEX. CIV. PRAC. & REM. CODE § 51.016 (West 2014) .................................... xv, 3, 7
TEX. LAB. CODE § 406.033(a) (West 2015) .............................................................22
TEX. LAB. CODE § 406.033(e) (West 2015) .................................. v, 2, 21, 22, 23, 24
xiii
RULES
TEX. R. APP. P. 9.4(i) ................................................................................................39
TEX. R. APP. P. 38.1(a) .............................................................................................. ii
xiv
STATEMENT OF THE CASE
Nature of the Case: Plaintiff Mario Flores filed suit against AutoZone, Inc. and
AutoZoners, L.L.C., asserting a personal injury claim arising
out of an alleged workplace injury. (CR 9-16, 26)
Trial court: The Honorable Ana Lisa Garza of the 229th Judicial District
Court, Starr County, Texas. (CR 294; RR)
Trial Court’s
Disposition: The trial court signed an Order denying “Defendants’
Motion to Compel/Enforce Arbitration” on April 27, 2015.
(CR 294) The AutoZone Appellants1 have pursued an
interlocutory appeal from that order, which refused to
enforce the arbitration provisions of the AutoZone Texas
Occupational Injury Benefit Plan. (CR 299-300, 307-09)
Parties in the
Court of Appeals: The Appellants, AutoZone, Inc. and AutoZoners, L.L.C., are
the Defendants below. Appellee, Mario Flores, is the
Plaintiff below.
Requested
Disposition from
This Court: The AutoZone Appellants request that the Court reverse the
trial court’s order denying their Motion to Compel
Arbitration; that the Court render judgment enforcing the
parties’ agreement to arbitrate, compelling arbitration, and
staying the trial court’s proceedings pending arbitration; and
that the Court award Appellants their costs on appeal.
1
This brief refers to the Appellants collectively as “AutoZone” or the “AutoZone Appellants.”
xv
STATEMENT REGARDING JURISDICTION
This interlocutory appeal is authorized by section 51.016 of the Texas Civil
Practice and Remedies Code. TEX. CIV. PRAC. & REM. CODE § 51.016 (West 2014)
(“In a matter subject to the Federal Arbitration Act (9 U.S.C. Section 1 et seq.), a
person may take an appeal or writ of error to the court of appeals from the
judgment or interlocutory order of a district court, county court at law, or county
court under the same circumstances that an appeal from a federal district court’s
order of decision would be permitted by 9 U.S.C. Section 16”); see also FEDERAL
ARBITRATION ACT, 9 U.S.C. § 16(a)(1) (noting that appeal may be taken from
order denying stay and from order denying petition to order arbitration to proceed).
xvi
STATEMENT REGARDING ORAL ARGUMENT
Though Appellants believe that this appeal can be resolved in their favor
based on well-established federal and state precedent, oral argument would be
helpful to permit the Court and counsel to discuss the specific terms of the parties’
agreement, the applicability of the Federal Arbitration Act, the distinction between
matters to be determined by an arbitrator and those to be determined by the trial
court, and the lack of any viable defense to the arbitration agreement’s
enforcement.
xvii
ISSUE PRESENTED
Issue No. 1:
Whether the AutoZone Appellants are entitled to have the arbitration provisions
contained in the parties’ agreement enforced pursuant to the Federal Arbitration
Act, resulting in a referral of this matter to arbitration.
The arbitration agreement expressly invokes application of the Federal Arbitration
Act, as well as AutoZone’s involvement in interstate commerce. That agreement is
broad in scope – applying to claims for personal injury – and reserves to the
arbitrator all questions regarding the interpretation, enforcement, and scope of the
agreement. Regardless, Appellee Flores’ claims fall well within the agreement’s
scope; and Flores’ only defenses – based on section 1’s exemption, the Texas
Labor Code, and procedural unconscionability – have been rejected by Texas and
federal courts alike.
xviii
STATEMENT OF FACTS
On July 28, 2005, Appellee Mario Flores signed the AutoZone Texas
Occupational Injury Benefit Plan. (CR 77-139, 140) On the first page of that plan,
employees were provided notice, in both English and Spanish, that the document
concerned the employee’s rights and benefits under the plan. (CR 101) The notice
further advised the employee that, if he had any difficulty understanding English,
he should contact the risk manager at a designated address and telephone number
during normal business hours. (CR 101) The plan itself contained several
provisions addressing covered injuries, the benefits provided, and resolution
procedures – including provisions mandating the application of the Federal
Arbitration Act and the referral to arbitration of:
any legal or equitable claim or dispute relating to enforcement or
interpretation of the arbitration provisions in an AZTEX Advantage
Acknowledgement Form or this arbitration requirement; and
any legal or equitable claim by or with respect to you for any form of
physical or psychological damage, harm or death which relates to an
accident, occupational disease, or cumulative trauma (including, but
not limited to, claims of negligence or gross negligence or
discrimination; and claims for assault, battery, negligent
hiring/training/supervision/retention, emotional distress, retaliatory
discharge, or violation of any other noncriminal federal, state, or other
governmental common law, statute, regulation or ordinance in
connection with a job-related injury, regardless of whether the
common law doctrine was recognized or whether the statute,
regulation or ordinance was enacted before or after the effective date
of this booklet.
1
(CR 80-83) Flores not only signed the agreement’s acknowledgement form in
2005, but he later acknowledged that he had read and understood the plan
documents again in 2011 and 2012 – this time through a computer system that
provided a Spanish translation of all relevant documents by merely making a
Spanish-language selection. (CR 174-75, 180, 182, 187-91)
On March 27, 2013, Appellee Flores allegedly sustained an on-the-job injury
while working as manager of an AutoZone store in Rio Grande City, Texas. (CR
11) Specifically, Appellee Flores alleged that he fell from a ladder while
attempting to ascend it with boxed merchandise. (CR 11) Though Appellee Flores
applied for and received benefits under the plan, he nevertheless filed suit against
AutoZone, Inc. and AutoZoners, L.L.C. on January 14, 2015, alleging negligence
and seeking monetary relief. (CR 9-16, 26) The Defendants answered and, shortly
thereafter, filed a Motion to Compel Arbitration, seeking enforcement of the
arbitration provisions contained within the subject plan. (CR 28-31, 72-143)
Appellee Flores opposed the motion to compel, arguing: (1) that the
arbitration agreement’s location within an “employment” agreement triggered an
exception to the Federal Arbitration Act’s application; (2) section 406.033(e) of the
Texas Labor Code precludes enforcement of the agreement; and (3) the agreement
is procedurally unconscionable because Flores could not read or write English
when he was asked to acknowledge it. (CR 145-60) The AutoZone Appellants
2
replied, and the trial court held a hearing on April 13, 2015. (CR 144, 161-202;
RR) Thereafter, Flores attempted to submit additional evidence in support of his
unconscionability defense, to which AutoZone objected. (CR 203-87, 288-93) On
April 27, 2015, the trial court signed an Order denying “Defendants’ Motion to
Compel/Enforce Arbitration.” (CR 294) The AutoZone Appellants then timely
perfected an interlocutory appeal to this Court pursuant to section 51.016 of the
Texas Civil Practice and Remedies Code. (CR 299-300, 307-09)
SUMMARY OF THE ARGUMENT
Both Texas and federal courts have long acknowledged arbitration as a
preferred alternative to litigation in a judicial forum, generally and in the specific
context of occupational benefit plans. Those same courts have long enforced
arbitration provisions under the Federal Arbitration Act when the contract
expressly invokes the federal act and also when the contract involves interstate
commerce. Not only does the arbitration agreement here expressly invoke the
FAA in the plan’s provisions, but it expressly invokes AutoZone’s involvement
with interstate commerce. Certainly, the invocation of the FAA is enough to
trigger its application. But, should there be any doubt, AutoZone’s own
involvement in interstate commerce – through its interstate purchase and sale of
goods as expressed in the agreement, its incorporation in a different state, and the
administration of medical benefits by an entity located in that same foreign state –
3
sufficiently tethers the agreement to interstate commerce for application of the
FAA. Thus, the Federal Arbitration Act and its strong presumption in favor of
arbitration govern the agreement at issue in this appeal.
Entrenched legal principles require courts to construe arbitration provisions
broadly and employ a presumption of arbitrability when analyzing whether a
particular plaintiff’s claims fall within the scope of an agreement to arbitrate.
Though the arbitration provisions refer all issues concerning the scope of the
agreement to the arbitrator himself for determination, Appellee Flores’ personal
injury claims fall squarely within the plan’s scope, which extends to and
encompasses all claims for personal injury of whatever kind. Despite the strong
public policy in favor of arbitration and the mountain of precedent requiring
enforcement here, Appellee Flores nevertheless attempted a series of meritless
roadblocks in an effort to thwart the motion to compel. But those efforts are futile.
Texas courts have rejected every one of Flores’ defenses through binding
precedent that requires this Court to do the same.
Flores first argued that the FAA does not apply to “contracts of
employment” and that the occupational benefit plan was just such a contract. Not
only is this a threshold question that the parties agreed to submit to the arbitrator
for resolution, but the Supreme Court of the United States has explained (on more
than one occasion) that the FAA expressly limits the phrase “contracts of
4
employment” to contracts involving employees who are actually engaged in the
shipment of goods – like seaman, railroad workers, and truck drivers. Flores
works in a retail store – just as the employee did in the seminal Supreme Court
case holding that such employment does not come within the only exception to the
FAA’s application. Flores offered no evidence that he is actually engaged in the
physical transport of goods across state lines because there is none.
Next, Flores argued that enforcing the arbitration agreement would violate
the Texas Labor Code – even though the Supreme Court has addressed and
rejected that exact argument. Though not clear, Flores appears to have conceded
the point at the hearing on AutoZone’s motion to compel. Regardless, it, too,
presents a threshold question of arbitrability and ultimately has no merit. Finally,
Flores argued that the arbitration agreement is procedurally unconscionable
because Flores, a Spanish speaker, could not read the agreement as presented to
him in English. However, because his argument attacks the contract as a whole
and because the arbitration agreement refers all matters relating to its interpretation
and enforcement to binding arbitration, the Supreme Court of the United States has
held that this question, too, is one for the arbitrator’s decision.
Even assuming a court could address the issue, Flores offered no evidence of
any inability to understand English and again thumbs his nose at binding precedent
regardless. This Court – based on precedent from the Supreme Court of Texas –
5
has rejected precisely this contention because illiteracy is no defense to contract.
Specifically, the Fourth Court considered and rejected as a defense to arbitration a
claimed inability to read English. In doing so, the Court refused to follow case law
that Flores cited to the trial court in support of his claim. And even under the case
law Flores cited below, he could not prevail. Those cases precluded arbitration
based on affirmative conduct attempting to hide the arbitration agreement from the
claimant, whereas here the evidence is precisely the opposite. That evidence
includes a notice in Spanish – which Flores acknowledges he received – providing
contact information to be used in the event anyone had difficulty understanding
any part of the agreement. And, in the years after the initial acknowledgement,
Flores acknowledged the agreement at least twice more on a computer system that
translated all documents into Spanish at the click of a button. In short, Flores
offered no viable defense to enforcement of the mandatory referral to arbitration;
and the trial court erred in denying AutoZone’s motion to compel. The Court
should reverse and render a referral to arbitration.
ARGUMENT AND AUTHORITIES
I. This Court Reviews the Trial Court’s Ruling De Novo
Review of a trial court’s decision on whether to enforce an arbitration
provision – though frequently couched in terms of abuse of discretion – is made de
novo when the appeal concerns legal issues, such as the interpretation of the
6
arbitration provision itself, matters of statutory construction, and the viability of
defenses to arbitration. See, e.g., City of San Antonio v. International Ass’n of Fire
Fighters, Local 624, Nos. 04-12-00783-CV and 04-13-00109-CV, 2013 WL
5508408, *3 (Tex. App. – San Antonio, Oct. 2, 2013, no pet., orig. proceeding)
(mem. op.) (“The existence and the applicability of the arbitration agreement is a
question of law and, thus, we review the decision de novo.”), quoting In re
FirstMerit Bank, N.A., 52 S.W.3d 749, 753-54 (Tex. 2001) (orig. proceeding)2 (if
agreement includes claims and opposing party cannot prove any defense, “the trial
court has no discretion but to compel arbitration and stay its own proceedings”);
see also State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006) (issues of statutory
construction are questions of law that courts review de novo); Brand FX, LLC v.
Rhine, 458 S.W.3d 195, 204 (Tex. App. – Fort Worth 2015, no pet.) (“Whether the
party resisting arbitration has established a defense to arbitration – such as waiver
or unconscionability – is a legal issue also subject to de novo review.”), citing In re
Poly-Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008) (orig. proceeding). Thus, the
Court must review the trial court’s denial of the AutoZone Appellants’ motion to
compel de novo.
2
Many of the judicial decisions cited in this brief arise out of original proceedings because, until
the enactment of section 51.016 of the Texas Civil Practice and Remedies Code in 2009, parties
did not have an interlocutory appellate remedy to challenge a trial court’s refusal to enforce
arbitration provisions. See TEX. CIV. PRAC. & REM. CODE § 51.016 (West 2014); cf. In re Labatt
Food Serv., L.P., 279 S.W.3d 640, 642-43 (Tex. 2009) (orig. proceeding) (“A party denied the
right to arbitrate pursuant to an agreement subject to the FAA does not have an adequate remedy
by appeal and is entitled to mandamus relief to correct a clear abuse of discretion”).
7
II. The AutoZone Appellants Established the Existence of a Valid
Arbitration Agreement Enforceable under the Federal Arbitration Act
The Supreme Court of Texas has set forth the test that governs the
determinations to be made in this interlocutory appeal:
A party seeking to compel arbitration must establish the existence of
an arbitration agreement, and show that the claims raised fall within
the scope of that agreement. See Cantella & Co. v. Goodwin, 924
S.W.2d 943, 944 (Tex. 1996). Once the party establishes a claim
within the arbitration agreement, the trial court must compel
arbitration and stay its own proceedings. Id.
In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (orig.
proceeding);3 see also In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (orig.
proceeding); FEDERAL ARBITRATION ACT, 9 U.S.C. §§ 3, 4 (mandating referral to
arbitration and stay of trial court proceedings when suit based on issue referable to
arbitration under a written arbitration agreement). The Federal Arbitration Act,
also known as the FAA, generally governs arbitration provisions contained in
contracts that expressly invoke its application, as well as those contained in
contracts that involve interstate commerce. FEDERAL ARBITRATION ACT, 9 U.S.C.
§ 2; see also In re L & L Kempwood Assocs., L.P., 9 S.W.3d 125, 127 (Tex. 1999)
(orig. proceeding) (per curiam). Even though the FAA is a federal act, Texas
courts have the authority to enforce its provisions; and the FAA applies to cases
pending in both state and federal courts when the agreement invokes its application
3
Abrogated in part on other grounds by In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002) (orig.
proceeding).
8
and also applies when the underlying transaction involves interstate commerce.
Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 112 (2001); Cantella & Co., Inc.
v. Goodwin, 924 S.W.2d 943, 944-45 (Tex. 1996) (orig. proceeding); Jack B.
Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992) (orig. proceeding).
By its motion and reply, the AutoZone Appellants fully met their burden.4
They demonstrated an enforceable, written arbitration agreement; application of
the Federal Arbitration Act; and that Appellee Flores’ claims fall within the scope
of the arbitration provision – assuming this is a question up for judicial
determination. Appellee Flores failed to assert any issue that would defeat
enforcement of the plan’s arbitration provisions; and, thus, the trial court abused its
discretion in denying the motion to compel.
A. The Parties Entered into a Binding Arbitration Agreement to
which the Federal Arbitration Act Applies
AutoZone’s Texas Occupational Injury Benefit Plan contains provisions
requiring Flores to pursue any complaint against AutoZone through the appropriate
arbitration procedures – including those relating to enforcement or interpretation of
the arbitration provisions and those relating to any claim for personal injury. (CR
80) The benefits plan is a contract to which the FAA, and its strong preference for
and presumptions in favor of arbitration, apply. See, e.g., Shearson/American
4
Of course, by filing its motion to compel and seeking to enforce the plan’s arbitration
provisions, the AutoZone Appellants do not waive any arguments they may have based on the
Appellee Flores’ failure to follow any aspect of the dispute resolution procedure.
9
Express, Inc. v. McMahon, 482 U.S. 220, 225 (1987) (noting that Federal
Arbitration Act was specifically enacted to overcome “judicial hostility to
arbitration agreements”).
1. The Plan Expressly Invokes the FAA
The plan expressly provides for the application of the FAA. Specifically,
the plan recites that “The Federal Arbitration Act will govern the interpretation,
enforcement, and proceedings under this arbitration requirement.” (CR 82-83)
Texas courts have held that the FAA governs a written arbitration agreement if the
parties have expressly contracted for the FAA’s application. See, e.g., In re
AdvancePCS Health, L.P., 172 S.W.3d 603, 605-06 & n.3 (Tex. 2005) (orig.
proceeding); In re HEB Grocery Co., L.P., 299 S.W.3d 393, 396-97 (Tex. App. –
Corpus Christi 2009, orig. proceeding); In re People’s Choice Home Loan, Inc.,
225 S.W.3d 35, 40 (Tex. App. – El Paso 2005, orig. proceeding); In re Kellogg
Brown & Root, 80 S.W.3d 611, 617 (Tex. App. – Houston [1st Dist.] 2002, orig.
proceeding); In re Alamo Lumber Co., 23 S.W.3d 577, 579 (Tex. App. – San
Antonio 2000, orig. proceeding); see also Volt Information Sciences, Inc. v. Board
of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478-79 (1989).
Indeed, Texas courts enforce the parties’ choice of the FAA to govern their
arbitration agreement regardless of the nexus to interstate commerce. See In re
ReadyOne Indus., 294 S.W.3d 764, 769 (Tex. App. – El Paso 2009, orig.
10
proceeding); In re Kellogg Brown & Root, 80 S.W.3d at 617; see also In re Jim
Walter Homes, Inc., 207 S.W.3d 888, 896 (Tex. App. – Houston 14th Dist.] 2006,
orig. proceeding) (“Courts honor the parties’ agreement to be bound by the FAA,
upholding choice-of-law provisions providing for application of the FAA.”). And
Appellee Flores’ response acknowledged the plan’s express invocation of the FAA.
(CR 147) (“Plaintiff’s Benefit Plan states that the Federal Arbitration Act . . . will
govern the interpretation, enforcement, and proceedings under the arbitration
requirement.”). While Flores argued that he fell within an exception to the FAA’s
application, he never disputed its general application otherwise and admitted
precisely the opposite.
2. The Plan Involves Interstate Commerce
Moreover, the plan involves interstate commerce as that concept has been
defined by courts so as to trigger the FAA’s application. The FAA unquestionably
applies if a contract involves commerce among the several states or “interstate
commerce.” FEDERAL ARBITRATION ACT, 9 U.S.C. § 2. The United States
Supreme Court has held that the word “involving,” as used in the FAA, is the
functional equivalent of “affecting.” Allied-Bruce Terminix Cos., Inc. v. Dobson,
513 U.S. 265, 273-74 (1995). As long as the contract or transaction affects
interstate commerce, the FAA applies; it is irrelevant even whether the parties
contemplated interstate commerce. Id. at 278-81.
11
Texas courts likewise construe the term “commerce” broadly, holding that
the amount of or effect on interstate commerce need not be substantial. In re L &
L Kempwood Assocs., L.P., 9 S.W.3d 125, 127 (Tex. 1999) (orig. proceeding); In
re Merrill Lynch Trust Co. FSB, 123 S.W.3d 549, 553 (Tex. App. – San Antonio
2003, orig. proceeding); Lost Creek Mun. Utility Dist. v. Travis Indus. Painters,
Inc., 827 S.W.2d 103, 105 (Tex. App. – Austin 1992, writ denied); see also BWI
Cos., Inc. v. Beck, 910 S.W.2d 620, 621 (Tex. App. – Austin 1995, orig.
proceeding). Instead, the contract need only involve or affect, i.e., relate to,
interstate commerce because that “standard implements the strong federal policy
favoring arbitration.” Lost Creek, 827 S.W.2d at 105.
The benefits plan at issue here involves interstate commerce in more than
one way. First, the plan itself expressly references the involvement of interstate
commerce by explaining that “AutoZone is engaged in transactions involving
interstate commerce (for example, purchasing goods and services from outside
Texas which are shipped to Texas and providing goods and services to customers
from other states) and your employment involves such commerce.” (CR 82)
Appellee Flores never disputed the involvement of interstate commerce as set forth
in the plan. See In re Big 8 Food Stores, Ltd., 166 S.W.3d 869, 880 (Tex. App. –
El Paso 2005, orig. proceeding) (noting company’s plan recitation that it is
involved in interstate commerce and lack of evidence to the contrary offered by
12
claimant); In re Gardner Zemke Co., 978 S.W.2d 624, 626 (Tex. App. – El Paso
1998, orig. proceeding) (noting that real parties in interest did not contest interstate
commerce allegations). Flores’ employment relationship with AutoZone and the
benefit plan itself necessarily “involve” interstate commerce. In re Big 8 Food
Stores, Ltd., 166 S.W.3d at 880 (relationship between employer who is regularly
engaged in activities related to interstate commerce and its employees is affected
by interstate commerce as a matter of law).
Additionally, the health benefits plan is administered out of state.
Specifically, the plan administrator and director of benefits are located in
Memphis, Tennessee. (CR 88-89, 97) Again, that connection is more than enough
to “involve” interstate commerce to trigger application of the FAA. See, e.g., In re
Nexion Health at Humble, Inc., 173 S.W.3d 67, 69 (Tex. 2005) (orig. proceeding)
(“Because ‘commerce’ is broadly construed, the evidence of Medicare payments
made to HHC on John’s behalf is sufficient to establish interstate commerce and
the FAA’s application in this case”); City of San Antonio v. International Ass’n of
Fire Fighters, Local 624, Nos. 04-12-00783-CV and 04-13-00109-CV, 2013 WL
5508408, *2 (Tex. App. – San Antonio, Oct. 2, 2013, no pet., orig. proceeding)
(mem. op.) (FAA applied to Collective Bargaining Agreement that encompassed
provision of health insurance benefits); Petroleum Analyzer Co. LP v. Franek
Olstowki, No. 01-09-00076-CV, 2010 WL 2789016, *6 (Tex. App. – Houston [1st
13
Dist.], Jul. 15, 2010, no pet.) (mem. op.) (“[E]ven if the parties had not expressly
agreed that interstate commerce is affected, PAC is a Delaware limited partnership;
therefore, this agreement affects interstate commerce.”); Manahan v. Meyer, 862
S.W.2d 130, 133 (Tex. App. – Houston [1st Dist.] 1993, writ denied) (“Appellants
pled that Haworth, a Michigan corporation with a home office in Michigan, bought
insurance from Safeco, whose home office is in Washington, to cover Manahan
and other Haworth employees working in Texas. Thus, interstate commerce by
Haworth was admitted”); United States v. Lauersen, No. 98 CR. 1134(WHP), 1999
WL 637237, *6 (S.D.N.Y., Aug. 20, 1999) (not designated for publication) (“It
requires little effort, and certainly no accretion of ‘inference upon inference,’ . . . to
find a rational bases for concluding that the administration of private health care
programs is an economic activity that substantially affects interstate commerce”).
Based on the foregoing, the FAA controls.
B. The Arbitration Agreement Encompasses Mario Flores’ Claims;
Regardless, the Issue Is One for the Arbitrator to Decide
1. The Arbitration Agreement Reserves for the Arbitrator’s
Decision the Issue of Whether Flores’ Claims Fall within Its
Scope
As noted above, the arbitration provisions are broad in scope, covering all
manner of personal injury, as well as all issues regarding relating to the
enforcement or interpretation of the arbitration provisions and “[t]he determination
of whether a claim is covered by these provisions.” (CR 80) As courts have
14
recognized, when an arbitration agreement includes such expansive language, the
determination of whether a claim falls within the scope of such an agreement is
reserved for the arbitrator. See, e.g., Forest Oil Corp. v. McAllen, 268 S.W.3d 51,
61 & n.37 (Tex. 2008); Seven Hills Commercial, LLC v. Mirabal Custom Homes,
Inc., 442 S.W.3d 706, 711 (Tex. App. – Dallas 2014, pet. denied); IHS Acquisition
No. 171, Inc. v. Beatty-Ortiz, 387 S.W.3d 799, 807-08 (Tex. App. – El Paso 2012,
no pet.) (“An arbitration provision may give the arbitrator the power to resolve
gateway issues regarding validity and enforceability of the arbitration agreement.
In that event, the entire matter of arbitrability is transferred from the courts to the
arbitrator. . . . Arbitration agreements that clearly and unmistakably show intent to
assign gateway issues to the arbitrator are fully enforceable.”), citing Rent-A-
Center, West, Inc. v. Jackson, 561 U.S. 63, 72-73 (2010); Ernst & Young LLP v.
Martin, 278 S.W.3d 497, 500-01 (Tex. App. – Houston [14th Dist.] 2009, no pet.,
orig. proceeding); Valdez v. Autozone, Inc., No. H-14-3386, 2015 WL 1099700, *1
(S.D. Tex., Feb. 17, 2015) (not designated for publication).
Given the foregoing, the arbitration provisions expressly reserve any
questions regarding the scope of the arbitration agreement and whether it
encompasses Mario Flores’ claims for the arbitrator’s determination. Regardless,
Mario Flores’ claim for damages alleged to have resulted from an on-the-job injury
clearly fall within the provisions’ scope.
15
2. Even if the Scope of the Arbitration Agreement Is an Issue
for Judicial Determination, Flores’ Personal Injury Claims
Fall Well within the Agreement’s Terms
When deciding whether claims fall within the terms of an arbitration
agreement, courts employ a strong presumption in favor of arbitration. In re
Rubiola, 334 S.W.3d at 225, citing Cantella & Co., Inc., 924 S.W.2d at 944
(“[f]ederal and state law strongly favor arbitration,” and “a presumption exists in
favor of agreements to arbitrate under the FAA”); Prudential Sec. Inc. v. Marshall,
909 S.W.2d 896, 899 (Tex. 1995) (orig. proceeding) (under the FAA, “any doubts
as to whether claims fall within the scope of the agreement must be resolved in
favor of arbitration,” and that “[t]he policy in favor of enforcing arbitration
agreements is so compelling that a court should not deny arbitration ‘unless it can
be said with positive assurance that an arbitration clause is not susceptible of an
interpretation which would cover the dispute at issue’”).
Here, the provision in question requires, in part, that all claims for physical
damage or harm made in connection with a job-related injury, are to be resolved by
arbitration. (CR 80) Given that Mario Flores sues for precisely that, his claims fall
within the arbitration provisions’ scope. (CR 9-16) See, e.g., In re HEB Grocery
Co., L.P., 299 S.W.3d 393, 398 (Tex. App. – Corpus Christi, 2009, orig.
proceeding) (agreement, which included provision to submit any claims for
occupational injury to binding arbitration, encompassed claimant’s personal injury
16
claim); In re H.E. Butt Grocery Co., 17 S.W.3d 360, 367 (Tex. App. – Houston
[14th Dist.] 2000, orig. proceeding) (same). Because AutoZone demonstrated the
existence of a valid agreement and claims that fall within its scope (though that
issue is one for the arbitrator’s determination), the trial court was obligated to grant
AutoZone’s motion. The Court should reverse the trial court’s denial.
III. None of Appellee Flores’ Efforts to Thwart the Arbitration Agreement
Have Merit
Once the movant has demonstrated a mandatory referral to arbitration and
the party opposing arbitration has failed to prove a defense to its enforcement, the
trial court has no discretion but to compel arbitration and stay its own proceedings.
In re FirstMerit Bank, N.A., 52 S.W.3d at 753-54; see also J.M. Davidson v.
Webster, 128 S.W.3d 223, 227 (Tex. 2003) (stating that, if trial court finds a valid
agreement, burden shifts to party opposing arbitration to raise an affirmative
defense to enforcement). Appellee Flores tried to interpose three roadblocks to
AutoZone’s motion to compel: (1) the exception for “contracts of employment”
contained in section 1 of the FAA; (2) the purported bar of the Texas Labor Code;
and (3) a claim of procedural unconscionability. Courts have rejected all three in
contexts analogous to this case and did so through binding precedent that this
Court is bound to follow. Moreover, the language of the parties’ arbitration
agreement requires these threshold issues and defenses to be referred to arbitration
for resolution by the arbitrator. Because Flores raises arguments that must be
17
decided by the arbitrator and has, in any event, failed to prove any defense, the trial
court erred in denying the motion to compel.
A. Courts Recognize That the Federal Arbitration Act’s Exception
for “Employment” Agreements Applies Solely to Transportation
Workers, Unlike Appellee Flores
1. Flores Cannot Argue an Exception to the FAA When He
Expressly Agreed to the FAA’s Application
Appellee Flores’ first defense against enforcement of the arbitration
agreement under the FAA was to point to section 1 of the FAA and argue that the
benefits plan constitutes a “contract of employment” exempt from application of
the FAA. See 9 U.S.C. § 1 (“nothing herein contained shall apply to contracts of
employment of seaman, railroad employees, or other class of workers engaged in
foreign or interstate commerce”). But, as discussed above, the parties expressly
agreed to arbitrate their disputes pursuant to the Federal Arbitration Act. (CR 82-
83) Given that express agreement, Flores cannot now argue that the FAA does not
govern interpretation and enforcement. And any such argument would, by
necessity, employ circular logic – for, it is only through application of the FAA
that Flores invokes section 1’s exception. (CR 147) It makes no sense for the
parties to agree to arbitration and to agree that the FAA governs their agreement,
only to be told that they have no enforceable agreement under the FAA because
that invocation was contained in a “contract of employment.”
18
2. Any Question Regarding Interpretation or Enforcement of
the Agreement Must Be Decided by the Arbitrator
In fact, given the contract’s express invocation of the FAA as well as its
invocation of the AAA rules, the question asserted by Flores necessarily involves
“enforcement or interpretation” of the agreement or at least a question of the
arbitrator’s jurisdiction – which the parties expressly agreed would be determined
by the arbitrator. (CR 80-83) As noted above, parties may contract for threshold
determinations to arbitrability to be made by the arbitrator himself – including a
question of whether the exception contained in section 1 applies; and that is
precisely what the parties did here. See, e.g., Green v. SuperShuttle Int’l, Inc., 653
F.3d 766, 768-69 (8th Cir. 2011) (holding that parties, who invoked the AAA rules
giving the arbitrator power to determine his own jurisdiction, agreed to allow the
arbitrator to determine threshold questions such as whether section 1’s exception
applied to the parties’ agreement to preclude governance of the FAA).
3. Regardless, the Supreme Court Has Limited the Exception
to Transportation Workers Actually Engaged in the
Interstate Transport of Goods
Regardless, the Supreme Court of the United States held in Circuit City
Stores, Inc. v. Adams, 532 U.S. 105, 112, 119 (2001), that section 1 applies only to
“contracts of employment of transportation workers.” (emphasis added); accord
EEOC v. Waffle House, Inc., 534 U.S. 279, 289 (2002) (“Employment contracts,
except for those covering workers engaged in transportation, are covered by the
19
[FAA].”); see also BWI Cos. v. Beck, 910 S.W.2d 620, 622 (Tex. App. – Austin
1995, orig. proceeding); White-Weld & Co., Inc. v. Mosser, 587 S.W.2d 485, 487
(Tex.Civ.App. – Dallas 1979, writ ref’d n.r.e.).
Importantly, the Circuit City Court explained that the phrase “engaged in . . .
interstate commerce,” as used in section 1’s exemption, was considerably narrower
than the phrase “involving commerce” used in section 2 to describe the kinds of
agreements to which the FAA applies. 532 U.S. at 112. Flores, at the hearing on
AutoZone’s motion to compel, led the trial court astray by collapsing the two
inquiries. (RR at 7-8) But they are different, as the Supreme Court of the United
States has explained. The FAA applies to employment contracts that evidence a
transaction involving interstate commerce – the only exception being when the
employee is actually engaged in such commerce, i.e., actually engaged in the
transportation of goods. 9 U.S.C. §§ 1, 2; Circuit City, 532 U.S. at 114-19.
Appellee Flores made no argument and offered no evidence that he was a
transportation worker actually engaged in the movement of goods in interstate
commerce within the meaning of section 1 of the FAA. Rather, he confirmed his
work in a single retail location – just like the retail employee the Supreme Court
found did not fall within section 1’s exception. Circuit City, 532 U.S. at 109. (CR
145) Rather than acknowledge governing Supreme Court authority, Flores offered
a single citation to In re Swift Transp. Co., 311 S.W.3d 484, 486 (Tex. App. – El
20
Paso 2009, orig. proceeding), in which the court of appeals held that the FAA did
not apply to an arbitration agreement between a truck driver and his employer. But
what Flores failed to understand is that trucks drivers are “transportation workers”
as that term is used in section 1, making In re Swift’s holding inapplicable here to a
retail employee. As a result, the trial court’s order denying the AutoZone
Appellants’ motion to compel should be reversed and the agreement enforced.
B. The Texas Workers’ Compensation Act Does Not Preclude
Enforcement of the Plan’s Arbitration Provisions, Nor Could It in
Light of the Federal Arbitration Act’s Supremacy5
Appellee Flores next asserted that the arbitration agreement violated section
406.033(e) of the Texas Labor Code because it waived his cause of action before
his workplace injury occurred. That argument, too, lacks merit and provides no
basis for the denial of AutoZone’s motion to compel.
5
In the context of this point, Appellee Flores references that the AutoZone Appellants did not
sign the arbitration agreement and that he had no recollection of doing so. Assuming that this
could be construed as an additional defense to the enforcement of the arbitration provisions, the
FAA does not require arbitration clauses to be signed, as long as they are written and agreed to
by the parties. See, e.g., In re AdvancePCS Health, L.P., 172 S.W.3d 603, 606 n.5 (Tex. 2005);
see also In re Macy’s Tex., Inc., 291 S.W.3d 418, 418 (Tex. 2009) (orig. proceeding) (per
curiam) (“[t]he FAA contains no requirements for the form or specificity of arbitration
agreements except that they be in writing; it does not even require that they be signed”); see also
In re Dillard Dep’t Stores, 198 S.W.3d 778, 780-81 (Tex. 2006) (orig. proceeding) (at-will
employee who receives notice of an employer’s arbitration policy and continues working with
knowledge of the policy accepts the terms as a matter of law); In re Halliburton Co., 80 S.W.3d
566, 569 (Tex. 2002) (orig. proceeding) (holding that continued employment constituted
acceptance as a matter of law). Regardless, Appellee Flores did sign the acknowledgement form,
which reiterated his acceptance and agreement to comply with the plan’s arbitration provisions.
See, e.g., In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d 161, 163 (Tex. 2006) (orig. proceeding)
(by signing the acknowledgement, employee acknowledged receipt of the mutual agreement to
arbitration claims); In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005) (orig. proceeding)
(“Absent fraud, misrepresentation, or deceit, a party is bound by the terms of the contract he
signed, regardless of whether he read it or thought it had different terms.”). (CR 140)
21
1. The Supreme Court of Texas Has Rejected This Exact
Argument, and Flores Conceded as Much Below
Section 406.033(e) of the Texas Labor Code provides that a cause of action
against an employer by an employee not covered by workers’ compensation
insurance brought to recover damages for personal injuries sustained in the course
and scope of employment “may not be waived by an employee before the
employee’s injury or death.” TEX. LAB. CODE § 406.033(a), (e) (West 2015).
However, section 406.033(e) is no impediment to arbitration because the Supreme
Court of Texas has rejected Flores’ exact argument. In re Golden Peanut Co.,
LLC, 298 S.W.3d 629, 631 (Tex. 2009) (orig. proceeding) (per curiam).
Specifically, the Supreme Court examined the interaction between section
406.033 and the FAA and held that section 406.033(e) does not render an
arbitration agreement void. In re Golden Peanut Co., LLC, 298 S.W.3d at 631.
The Court explained that “an agreement to arbitration is a waiver of neither a cause
of action nor the rights provided under section 406.033(a), but rather an agreement
that those claims should be tried in a specific forum. Accordingly, section
406.033(e) does not render the arbitration agreement void.” See also In re Odyssey
Healthcare, Inc., 310 S.W.3d 419, 423 (Tex. 2010) (orig. proceeding) (same).
In apparent recognition of this precedent, Flores withdrew the point at the
hearing on AutoZone’s motion to compel. (RR at 7) Thus, to the extent that this
argument would not also be subject to arbitration as one of the threshold questions
22
the parties agreed would be resolved by the arbitrator – because the parties agreed
to submit all issues of the agreement’s interpretation and enforcement to arbitration
– Flores’ concession and binding Supreme Court precedent preclude it anyway.
2. To the Extent Section 406.003(e) Would Preclude
Arbitration, the FAA Would Preempt It
Moreover, the FAA would preempt section 406.033(e) to the extent that it
would preclude an otherwise unenforceable arbitration agreement. Under the
supremacy clause of the United States Constitution, the FAA preempts all
otherwise applicable state laws. U.S. CONST. art. VI, cl.2; see also Southland
Corp. v. Keating, 465 U.S. 1, 14-16 (1984) (Federal Arbitration Act creates
substantive rules applicable in state and federal courts to prevent states from
limiting the enforceability of arbitration agreements). By enacting the FAA,
Congress intended to foreclose state legislative attempts to undercut the
enforceability of arbitration agreements. Southland, 465 U.S. at 16.
“In short, the FAA ‘represents a federal policy favoring arbitration,
notwithstanding any state substantive or procedural policies to the contrary.” In re
MP Ventures of So. Tex., Ltd., 276 S.W.3d 524, 529 (Tex. App. – San Antonio
2008, orig. proceeding), quoting In re Border Steel, Inc., 229 S.W.3d 825, 831
(Tex. App. – El Paso 2007, orig. proceeding); see also Jack B. Anglin Co., 842
S.W.2d at 270-71 (holding that FAA preempts application of non-waiver provision
of the Texas Deceptive Trade Practices Act); In re Turner Bros. Trucking Co., 8
23
S.W.3d 370, 374 (Tex. App. – Texarkana 1999, orig. proceeding) (the FAA “takes
precedence over state attempts, legislative or judicial, to undercut the
enforceability of arbitration agreements”). As a result, to the extent section
406.033(e) could be said to conflict with the FAA following In re Golden Peanut
Co., to the extent Flores did not concede the point below, and to the extent the
issue were one for the Court to decide, the FAA would preempt section 406.033(e)
and preclude it from barring enforcement of the parties’ arbitration agreement. See
In re Border Steel, Inc., 229 S.W.3d 825, 832 (Tex. App. – El Paso 2007, no pet.).
C. Appellee Flores Failed to Demonstrate Procedural
Unconscionability6
1. Appellee Flores Attacked the Parties’ Agreement as a
Whole – an Argument That the Supreme Court of the
United States Has Held Must Be Resolved by the Arbitrator
In the trial court, Appellee Flores asserted that the arbitration agreement was
procedurally unconscionable because he was unable to read the English version
with which he was provided. (CR 149-51) While arbitration agreements “may be
6
Flores’ response specifically argues only procedural unconscionability. (CR 149-51; RR 8-11)
That said, he sprinkles references to substantive unconscionability in that same discussion,
without making any argument that the agreement is substantively unconscionable. (CR 149-51;
RR 9) To be thorough, the AutoZone Appellants would note that the Supreme Court of Texas
has held that “there is nothing per se unconscionable about arbitration agreements.” In re Olshan
Foundation Repair Co., LLC, 328 S.W.3d 883, 892 (Tex. 2010) (orig. proceeding), quoting EZ
Pawn Corp. v. Mancias, 934 S.W.2d 87, 90-91 (Tex. 1996) (orig. proceeding) (per curiam).
Instead, both Texas and federal courts favor arbitration. Id. Likewise, “[a]dhesion contracts are
not automatically or per se unconscionable,” including those that contain arbitration provisions.
In re Lyon Fin. Servs., 257 S.W.3d 228, 233 (Tex. 2008) (orig. proceeding). Moreover,
“[b]ecause an employer has a general right under Texas law to discharge an at-will employee, it
cannot be unconscionable, without more, merely to premise continued employment on
acceptance of new or additional employment terms.” In re Halliburton Co., 80 S.W.3d at 572.
24
invalidated by ‘generally applicable contract defenses, such as fraud, duress, or
unconscionability,’” (Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68
(2010)), Flores necessarily attacks the benefits agreement as a whole – as opposed
to the arbitration agreement exclusively. The arbitration provisions at issue were
one part of a larger occupational injury benefit plan, which Appellee Flores
acknowledged by his signature on July 28, 2005. (CR 140) Flores’ claim of
invalidity by virtue of being unable to read any part of that agreement necessarily
challenges the entire agreement rather than just the arbitration provision in
particular.
Arguments against the validity of an agreement, of which an arbitration
provision is merely a part, are referable to arbitration along with the rest of the
case. See, e.g., Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 406
(1966). In Prima Paint, a party defended against a referral to arbitration on the
basis that it had been fraudulently induced to sign the contract containing the
arbitration provision. 388 U.S. at 404. Settling a conflict among the appellate
courts, the Supreme Court of the United States held that “a federal court may
consider only issues relating to the making and performance of the agreement to
arbitrate.” Id. “[U]nless the challenge is to the arbitration clause itself, the issue of
the contract’s validity is considered by the arbitrator in the first instance.” Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-46 (2006) (holding that
25
Prima Paint rule also applies to FAA cases pending in state courts, as a matter of
substantive federal arbitration law). “[A] party’s challenge to another provision of
the contract, or to the contract as a whole, does not prevent a court from enforcing
a specific agreement to arbitrate.” Rent-A-Center, 561 U.S. at 70.
Following these principles, Texas courts have held that the defense of
unconscionability must be determined by the arbitrator when it necessarily refers to
the agreement as a whole. See, e.g., In re Olshan Found. Repair Co., 328 S.W.3d
883, 898 (Tex. 2010) (orig. proceeding) (“[W]hen the parties have contracted for
arbitration of their disputes, a trial court ‘may consider only issues relating to the
making and performance of the agreement to arbitrate.”); Perry Homes v. Cull, 258
S.W.3d 580, 589 (Tex. 2008) (“[A]rbitrators generally must decide defenses that
apply to the whole contract, while courts decide defenses relating solely to the
arbitration clause.”); In re FirstMerit Bank, N.A., 52 S.W.3d at 756 (“The do Los
Santoses assert the defenses of unconscionability, duress, fraudulent inducement,
and revocation. We again note that these defenses must specifically relate to the
Arbitration Addendum itself, not the contract as a whole, if they are to defeat
arbitration.”); Henry v. Gonzalez, 18 S.W.3d 684, 691 (Tex. App. – San Antonio
2000, pet. dism’d, orig. proceeding) (allegation by non-movant that he was
fraudulently induced to sign the contract containing arbitration clause due to his
decreased mental capacity was an issue referable to arbitration).
26
In a case bearing striking similarities to the circumstances alleged here, a
federal district court held that a claim of procedural unconscionability was for the
arbitrator to determine. See Estate of Benitez v. Sears, Roebuck & Co., No. 3:13-
CV-0468-D, 2013 WL 4223875 (N.D. Tex., Aug. 14, 2013). There, the claimant
argued that he could not read or write English and had little formal education in
Spanish and, therefore, the arbitration agreement was invalid. Id. at *3. The court
held that “because plaintiffs’ challenge to validity attacks the entire agreement, not
the arbitration agreement specifically, [it] therefore is a question for the arbitrator
to decide.” Id. at **3-4 (“[T]he arbitration agreement in this case is contained
within the 51-page Plan; it is not a stand-alone agreement. And when Juan
electronically acknowledged that he had completed his Plan training, he was
acknowledging that he had received training regarding the Plan and its
requirements generally, which included the arbitration agreement. Plaintiffs
provide no evidence that Juan’s illiteracy in English, limited English
comprehension, or computer illiteracy invalidate the arbitration clause specifically
rather than the Plan in its entirety.”) (emphasis in original).
Because the claim of unconscionability went to the plan as a whole – even
though the plaintiffs only desired to invalidate the arbitration clause – the decision
was for the arbitrator to make in this case just as in Estate of Benitez. As a result,
the trial court erred in denying AutoZone’s motion to compel.
27
2. Even Assuming a Court Could Decide the Issue, This Court
Has Held That Illiteracy Is No Defense to Arbitration
In any event, Appellee Flores’ defense of procedural unconscionability
based on his purported illiteracy in English finds no support in binding Texas law.
Flores had the burden of showing that the arbitration provision is unconscionable –
a burden he failed to meet. Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069,
1077 (5th Cir. 2002) (“The party contesting the contractual arbitration provision
has the burden to show procedural unconscionability.”). Instead, the great weight
of authority – including binding precedent from the Supreme Court of Texas and
this Court – has rejected Appellee Flores’ attempted defense on a similar record.
a. Flores’ “Proof” Constitutes Barred Parol Evidence
and, Thus, Cannot Be Considered by the Court
Flores’ unconscionability defense focused on his alleged inability to read, in
English, the benefits plan and the arbitration provisions that were provided to him
initially. As discussed in detail below, Texas law provides no contractual defense
based on an inability to read English. Regardless, the parol evidence rule
precludes the Court from considering any evidence Flores attempted to offer.
The acknowledgement form signed by Flores expressly avows that he
received and read, or had the opportunity to read, the materials attached to
AutoZone’s motion to compel, including the arbitration provisions. (CR 140) This
is in addition to the front cover of the plan, which includes a notice in Spanish
28
providing a contract for further discussion of the plan in Spanish. (CR 101) As a
result, any claim by Flores that he could not read or did not have the opportunity to
read the plan documents in Spanish contradicts their express terms and cannot be
considered. See, e.g., In re H.E. Butt Grocery Co., 17 S.W.3d 360, 371 (Tex. App.
– Houston [14th Dist.] 2000, orig. proceeding); see also Kuper v. Schmidt, 161
Tex. 189, 338 S.W.2d 948, 952 (1960) (explaining that parol evidence rule
precludes consideration of extrinsic evidence to contradict, vary, or add to the
terms of an unambiguous written agreement absent fraud, accident, or mistake);
see also Cintas Corp. v. Quevedo, No. 04-11-00142-CV, 2012 WL 1940642, *3
(Tex. App. – San Antonio, May 30, 2012, no pet.) (mem. op.) (“The parol evidence
rule is not a rule of evidence, but a rule of substantive law. . . . Testimony that
varies the legal effect of a writing, whether objected to or not, is without probative
force.”). Flores is without evidence to support a procedural unconscionability
defense, and the trial court erred in denying AutoZone’s motion to compel.
b. Texas Law Does Not Recognize an Inability to Read
English as a Defense to Contract – Even with an
Unconscionability Label – and Flores Offered No
Supportive Evidence in Any Event
i. Flores Offered No Proof of an Inability to
Speak, Read, or Write English
Generally speaking, procedural unconscionability refers to the circumstances
surrounding the adoption of a contract. In re Halliburton Co., 80 S.W.3d at 571.
29
It relates to the making or inducement of the contract, focusing on the facts
surrounding the bargaining process. TMI, Inc. v. Brooks, 225 S.W.3d 783, 792
(Tex. App. – Houston [14th Dist.] 2007, pet. denied, orig. proceeding). Again,
Flores based his assertion of procedural unconscionability on his claim that he
cannot read or write English, coupled with his claim that the plan documents he
received were in English. (CR 149-51) However, even assuming Flores’ proffer
could be considered, Flores offered absolutely no evidence that he could not speak,
read, or write English. His initial affidavit avers only that he did not receive the
AZTEC Advantage document in Spanish. (CR 155) It nowhere denies an ability
to read the English version that he acknowledged he did receive. (CR 140) And
the “evidence” he tried to offer by way of his post-hearing supplement likewise
falls far short of that needed to prove an unconscionability defense.
After the hearing on AutoZone’s motion to compel, Flores filed
supplemental evidence, to which AutoZone objected. (CR 203-87, 288-93) That
offer consisted of employment forms and the transcripts of telephone conversations
that purportedly had been translated from Spanish to English. (CR 207-87) Those
documents nowhere demonstrate Flores’ inability to speak, read, or write English.
Indeed, on their face, many of them demonstrate precisely the opposite. To fill in
the blanks, Flores offered only unsworn statements of his purported inability to
speak, read, or write English – in the notice of filing to which the supplemental
30
evidence was attached. (CR 204) However, neither statements contained in
motions nor arguments of counsel are evidence. Elkins v. Stotts-Brown, 103
S.W.3d 664, 669 (Tex. App. – Dallas 2003, no pet.); Madeksho v. Abraham,
Watkins, Nichols & Friend, 57 S.W.3d 448, 455 (Tex. App. – Houston [14th Dist.]
2001, pet. denied) (noting that conclusory arguments contained in summary-
judgment response are not evidence). Flores failed to include in the record any
evidence to substantiate his claim of procedural unconscionability.
ii. Texas Does Not Recognize Illiteracy as a
Defense to Contract Generally or as a Defense
to Arbitration Specifically
Regardless, Texas courts have held for decades that, absent proof of mental
incapacity, a person who signs a contract is presumed to have read and understood
that contract unless he was prevented from doing so by trick or artifice. See
Associated Employers Lloyds v. Howard, 156 Tex. 277, 294 S.W.2d 706, 708
(1956); Indemnity Ins. Co. of N. Am. v. W.L. Macatee & Sons, 129 Tex. 166, 101
S.W.2d 553, 556-57 (1937). Equally well-settled is that illiteracy will not relieve a
party from the consequences of a contract because “[e]very person who has the
capacity to enter into a contract, in the absence of fraud, misrepresentation, and
concealment, is held to know what words were used in the contract, to know their
meaning, and to understand their legal effect.” Vera v. North Star Dodge Sales,
Inc., 989 S.W.2d 13, 17 (Tex. App. – San Antonio 1998, no pet.).
31
Numerous courts have rejected allegations similar to those asserted by
Flores in an effort to avoid an otherwise binding agreement. See, e.g., Lopez v.
Garbage Man, Inc., No. 12-08-00384-CV, 2011 WL 1259523, **7-8 (Tex. App. –
Tyler, Mar. 31, 2011, no pet.) (mem. op.) (reiterating principles set forth above and
rejecting challenge to release agreement based on claim that plaintiff was limited
in his ability to read or write English and, thus, unable to understand complex legal
document such as release agreement); In re Big 8 Food Stores, Ltd., 166 S.W.3d
869, 878 (Tex. App. – El Paso 2005, orig. proceeding) (“No evidence suggests that
Marquez lacked the mental capacity to contract. She argues that she was rushed to
sign the agreement and did not understand its terms. The undisputed evidence is
that she signed the agreement, was injured on the job and actually received and
accepted benefits under the plan. The fact that she now contends that she did not
understand a specific clause or term is immaterial to the validity of the
agreement.”); De Villagomez v. First Nat’l Bank, No. 13-04-00367-CV, 2005 WL
1832800, **1-2 (Tex. App. – Corpus Christi, Aug. 4, 2005, pet. denied) (mem. op.)
(“In the absence of fraud, a party’s failure to read an instrument before signing it is
not a ground for avoiding it. . . . This is true even in the case of illiteracy or an
inability to read English.”); Tamez v. Southwestern Motor Transport, Inc., 155
S.W.3d 564, 570 (Tex. App. – San Antonio 2004, no pet.) (reiterating principles
set forth above and holding that the plaintiff, a resident alien from Mexico and for
32
whom English was not his first language, was bound by release agreement absent
evidence of fraud, misrepresentation, or concealment in the procurement of the
agreement, of which there was no evidence); Nguyen Ngoc Giao v. Smith & Lamm,
P.C., 714 S.W.2d 144, 146 (Tex. App. – Houston [1st Dist.] 1986, no writ)
(rejecting challenge to contract by one claiming that he could not read, write, or
speak English).
In In re Ledet, No. 04-04-00411-CV, 2004 WL 2945699, **4-6 (Tex. App. –
San Antonio, Dec. 22, 2004, orig. proceeding) (mem. op.), this Court applied these
well-entrenched principles of Texas contract law to reject a claim of procedural
unconscionability by one seeking to avoid an arbitration agreement. In that case,
the claimant asserted procedurally unconscionability of an arbitration agreement
based on his inability to understand, speak, or read English; the failure of anyone
to explain the agreement to him; and his having felt pressured to sign the
arbitration agreement. Id. at *5. The claimant did not ask questions about the
agreement or seek an explanation of it. Id.
The Ledet Court referenced its prior decision in Vera and noted the absence
of any allegation of fraud, misrepresentation, or concealment. 2004 WL 2945699,
at **5-6. “That [the claimant] did not speak English and therefore could not read
the contract does not affect the validity of the contract.” Id. at *6. The Court
enforced the arbitration agreement and held that the trial court had no discretion
33
but to compel arbitration and stay its own proceedings. Id.; see also ReadyOne
Indus., Inc. v. Flores, ___ S.W.3d ___, 2014 WL 6982275, **8-9 (Tex. App. – El
Paso, Dec. 10, 2014, pet. filed) (rejecting defense of procedural unconscionability
asserted by claimant who was unable to read English because company provided
him with Spanish language version of documents and because claimant, who
signed acknowledgment form, was presumed to have known and fully
comprehended document and its legal effect absent evidence of trick or artifice); In
re Border Steel, Inc., 229 S.W.3d 825, 833-35 (Tex. App. – El Paso 2007, orig.
proceeding) (rejecting claim of procedural unconscionability due to Spanish
speaking individual’s inability to read agreement in English; evidence showed that
agreement was available in both English and Spanish translations, and illiteracy or
a language barrier is no defense to contract; moreover, claimant accepted benefits
under the plan); In re Rangel, 45 S.W.3d 783, 786-87 (Tex. App. – Waco 2001,
orig. proceeding) (rejecting claim of procedural unconscionability asserted by 75-
year-old man who had never attended school, was functionally illiterate, and was
hard of hearing; claimant never gave the impression he did not understand or could
not read the contract, the arbitration provision was never hidden from him, and
there was no evidence that the company concealed or misstated the existence or
terms of the arbitration provision). Flores has no unconscionability defense here.
34
iii. This Court Has Rejected Flores’ Authority, and
Flores Offered No Evidence of Fraud on
AutoZone’s Part Regardless
Despite this clear precedent, Flores relied on two decisions to support a
defense of procedural unconscionability here: In re Turner Bros. Trucking Co.,
Inc., 8 S.W.3d 370 (Tex. App. – Texarkana 1999, orig. proceeding); and Prevot v.
Phillips Petroleum Co., 133 F. Supp. 2d 937 (S.D. Tex. 2001). In In re Turner
Bros., the court held an arbitration agreement to be procedurally unconscionable
where the employees who presented the agreement did not understand it, the
relator had no one to explain the document and did not understand it, and the
claimant was functionally illiterate and had a reading disorder. 8 S.W.3d at 377.
And in Prevot, the claimants testified that they could not read English and that the
documents were not translated for them. 133 F. Supp. 2d at 940. Further, they
testified that their supervisors told them not to worry about the nature of the
agreement and to quickly sign the document so they could get back to work. Id.
Both of those decisions are distinguishable from the circumstances here.
There is no evidence that AutoZone personnel did not understand the agreement or
that Flores asked any questions or sought an explanation of the agreement. Rather,
the evidence is precisely the opposite. (CR 172-202) Though AutoZone explained
that it had no reason to know that Flores could not read English – personnel had
conversations with Flores in English, and Flores routinely furnished completed
35
company documents in English – Spanish materials were available to Flores in the
event he had asked. (CR 172-78, 192-202) However, Flores never sought a
Spanish translation or any other assistance with the plan document, though both
were readily available. (CR 175-78) AutoZone provided a notice in Spanish on
the face of the benefit summary and also made available the contract documents in
Spanish. (CR 101, 172-78) Flores not only signed the acknowledgement form in
2005, but he also acknowledged that he had read and understood the plan
documents again in 2011 and 2012 – this time through a computer system that
provided a Spanish translation of all relevant documents by merely clicking a
button to make a Spanish-language selection. (CR 174-75, 180, 182, 187-91)
In any event, this Court has rejected the holding in In re Turner Bros.
because “it is in direct conflict with [the Court’s] holding in Vera that illiteracy is
not a defense to contract formation.” In re Ledet, 2004 WL 2945699, at *6. And,
of course, neither a decision from the Texarkana Court of Appeals nor from a
federal district court binds this Court. See, e.g., Penrol Drilling Corp. v. Williams,
868 S.W.2d 294, 296 (Tex. 1993) (“While Texas courts may certainly draw upon
the precedents of the Fifth Circuit, or any other federal or state court, in
determining the appropriate federal rule of decision, they are obligated to follow
only higher Texas courts and the United States Supreme Court.”) (emphasis in
original).
36
Moreover, under the doctrine of horizontal stare decisis, the Court’s prior
holdings in Vera and In re Ledet govern and control the outcome here. Under the
doctrine, a panel of this Court is bound by a prior holding of another panel of this
Court absent an intervening, on point, and contrary holding from a higher court or
this Court sitting en banc. Glassman v. Goodfriend, 347 S.W.3d 772, 781 (Tex.
App. – Houston [14th Dist. 2011, pet. denied) (en banc); see also Medina v. Tate,
438 S.W.3d 583, 588 (Tex. App. – Houston [1st Dist.] 2013, no pet.) (same);
MobileVision Imaging Servs., L.L.C. v. LifeCare Hosps. of N. Tex., L.P., 260
S.W.3d 561, 566 (Tex. App. – Dallas 2008, no pet.) (same). Stare decisis
emanates from a desire for predictability in the law, which allows people to
rationally order their conduct and affairs. Grapevine Excavation, Inc. v. Maryland
Lloyds, 35 S.W.3d 1, 5 (Tex. 2000). No intervening decision of either the Supreme
Court of the United States, the Supreme Court of Texas, or this Court en banc has
held contrary to the Court’s holdings in Vera or In re Ledet. Rather, decisions
made by the Supreme Court of Texas are in accord. As such, those decisions
govern here and require a reversal of the trial court’s order.
And, in a more reasoned and persuasive federal decision, the court in Estate
of Benitez held that the plaintiffs did not demonstrate unconscionability. 2013 WL
4223875, at *4. The court turned to the mountain of Texas precedent rejecting
illiteracy as a defense to contract. Id. The court also addressed those decisions
37
that have found procedural unconscionability based, in part, on English illiteracy –
noting that they all involved other facts indicating that the signatory was denied an
opportunity to review and understand the agreement, beyond simply being unable
to read English. Id. This included instances not present here: (1) the employer
knew the employee did not speak English, explained some of the agreement in
Spanish, but did not translate the arbitration provision; (2) no one was available to
explain the agreement to the employee, including the representative who gave him
the agreement and did not himself understand it; and (3) the employees were told
not to worry about the contents of the agreement and to hurry up and sign it so that
they could get back to work. Id. By contrast, the evidence before the Benitez court
showed that the plan was available in both English and Spanish – just as here. Id.
at *5. Following Vera, Ledet, Tamez, and Benitez, the Court should reject the
claimed defense of procedural unconscionability and compel Flores to resolve his
claims by arbitration.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellants AutoZone, Inc. and
AutoZoners, L.L.C. respectfully request that this Court reverse the trial court’s
order denying their Motion to Compel Arbitration, that the Court render judgment
enforcing the parties’ arbitration agreement by compelling arbitration and staying
38
the trial court’s proceedings pending arbitration, and that the Court grant
Appellants such other and further relief to which they are entitled.
Respectfully submitted,
BRETT REYNOLDS & ASSOCIATES, P.C. THE LAW OFFICE OF
Brett T. Reynolds JACQUELINE M. STROH, P.C.
State Bar No. 16795500 Jacqueline M. Stroh
btreynolds@btrlaw.com State Bar No. 00791747
P. Brook Swilley jackie@strohappellate.com
State Bar No. 24041997 10101 Reunion Place, Suite 600
pbswilley@btrlaw.com San Antonio, Texas 78216
1250 N.E. Loop 410, Suite 420 (210) 477-7416
San Antonio, Texas 78209 (210) 477-7466 (telecopier)
(210) 805-9799
(210) 805-9654 (telecopier)
By: /s/ Jacqueline M. Stroh
Jacqueline M. Stroh
ATTORNEYS FOR APPELLANTS
AUTOZONE, INC. AND AUTOZONERS, L.L.C.
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION
Pursuant to Texas Rule of Appellate Procedure 9.4(i), the undersigned
certifies that this brief complies with the type-volume limitations; that, exclusive of
the exempted portions, the brief contains 9,708 words (counting all appropriate
footnotes); and that the brief has been prepared in proportionally-spaced typeface
using Times New Roman Font 14 in body text and Font 12 in footnotes.
/s/ Jacqueline M. Stroh
Jacqueline M. Stroh
39
CERTIFICATE OF SERVICE
I certify that a true copy of the foregoing Brief of Appellants was on the
23rd day of June, 2015, served by in accordance with the Texas Rules of Appellate
Procedure on the following counsel of record:
Jaime M. Lynn
jlynn@carlsonattorneys.com
Kiara Martinez
kmartinez@carlsonattorneys.com
THE CARLSON LAW FIRM, P.C.
11606 North Interstate Highway 35
Austin, Texas 78753
-and-
400 West Jasper Road
Killeen, Texas 76542
Attorneys for Plaintiff
/s/ Jacqueline M. Stroh
Jacqueline M. Stroh
40
CAUSE NO. DC-15-6
MARIO FLORES, § IN THE DISTRICT COURT
Plaintiff §
§
§
vs. § 229m JUDICW.. DISTRICT
§
AUTOZONE, INC. AND AUTOZONERS §
L.L.C. D/B/AAUTOZONE#3115, §
Defendants § STARR COUNI'Y, TEXAS
ORDER
On this day, crune to be heard "Defendants' Motion to Compel/Enforce Arbitration."
After considering Defendants' Motion, Plaintiff's Response, the evidence introduced, and
arguments by counsel, the Court hereby DENIES Defendants' Motion to Compel/Enforce
Arbitration in its entirety.
SIGNED this 21 day of _ _,_A_,_p+-'-r·1_\'---' 2015.
~~~
§ 1. “Maritime transactions” and “commerce” defined; exceptions to
operation of title
“Maritime transactions”, as herein defined, means charter parties, bills of lading of
water carriers, agreements relating to wharfage, supplies furnished vessels or
repairs to vessels, collisions, or any other matters in foreign commerce which, if
the subject of controversy, would be embraced within admiralty jurisdiction;
“commerce”, as herein defined, means commerce among the several States or with
foreign nations, or in any Territory of the United States or in the District of
Columbia, or between any such Territory and another, or between any such
Territory and any State or foreign nation, or between the District of Columbia and
any State or Territory or foreign nation, but nothing herein contained shall apply to
contracts of employment of seamen, railroad employees, or any other class of
workers engaged in foreign or interstate commerce.
§ 2. Validity, irrevocability, and enforcement of agreements to arbitrate
A written provision in any maritime transaction or a contract evidencing a
transaction involving commerce to settle by arbitration a controversy thereafter
arising out of such contract or transaction, or the refusal to perform the whole or
any part thereof, or an agreement in writing to submit to arbitration an existing
controversy arising out of such a contract, transaction, or refusal, shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract.
§ 3. Stay of proceedings where issue therein referable to arbitration
If any suit or proceeding be brought in any of the courts of the United States upon
any issue referable to arbitration under an agreement in writing for such arbitration,
the court in which such suit is pending, upon being satisfied that the issue involved
in such suit or proceeding is referable to arbitration under such an agreement, shall
on application of one of the parties stay the trial of the action until such arbitration
has been had in accordance with the terms of the agreement, providing the
applicant for the stay is not in default in proceeding with such arbitration.
§ 4. Failure to arbitrate under agreement; petition to United States court
having jurisdiction for order to compel arbitration; notice and service
thereof; hearing and determination
A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate
under a written agreement for arbitration may petition any United States district
court which, save for such agreement, would have jurisdiction under Title 28, in a
civil action or in admiralty of the subject matter of a suit arising out of the
controversy between the parties, for an order directing that such arbitration proceed
in the manner provided for in such agreement. Five days' notice in writing of such
application shall be served upon the party in default. Service thereof shall be made
in the manner provided by the Federal Rules of Civil Procedure. The court shall
hear the parties, and upon being satisfied that the making of the agreement for
arbitration or the failure to comply therewith is not in issue, the court shall make an
order directing the parties to proceed to arbitration in accordance with the terms of
the agreement. The hearing and proceedings, under such agreement, shall be within
the district in which the petition for an order directing such arbitration is filed. If
the making of the arbitration agreement or the failure, neglect, or refusal to
perform the same be in issue, the court shall proceed summarily to the trial thereof.
If no jury trial be demanded by the party alleged to be in default, or if the matter in
dispute is within admiralty jurisdiction, the court shall hear and determine such
issue. Where such an issue is raised, the party alleged to be in default may, except
in cases of admiralty, on or before the return day of the notice of application,
demand a jury trial of such issue, and upon such demand the court shall make an
order referring the issue or issues to a jury in the manner provided by the Federal
Rules of Civil Procedure, or may specially call a jury for that purpose. If the jury
find that no agreement in writing for arbitration was made or that there is no
default in proceeding thereunder, the proceeding shall be dismissed. If the jury find
that an agreement for arbitration was made in writing and that there is a default in
proceeding thereunder, the court shall make an order summarily directing the
parties to proceed with the arbitration in accordance with the terms thereof.
§ 5. Appointment of arbitrators or umpire
If in the agreement provision be made for a method of naming or appointing an
arbitrator or arbitrators or an umpire, such method shall be followed; but if no
method be provided therein, or if a method be provided and any party thereto shall
fail to avail himself of such method, or if for any other reason there shall be a lapse
in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then
upon the application of either party to the controversy the court shall designate and
appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act
under the said agreement with the same force and effect as if he or they had been
specifically named therein; and unless otherwise provided in the agreement the
arbitration shall be by a single arbitrator.
§ 6. Application heard as motion
Any application to the court hereunder shall be made and heard in the manner
provided by law for the making and hearing of motions, except as otherwise herein
expressly provided.
§ 7. Witnesses before arbitrators; fees; compelling attendance
The arbitrators selected either as prescribed in this title or otherwise, or a majority
of them, may summon in writing any person to attend before them or any of them
as a witness and in a proper case to bring with him or them any book, record,
document, or paper which may be deemed material as evidence in the case. The
fees for such attendance shall be the same as the fees of witnesses before masters
of the United States courts. Said summons shall issue in the name of the arbitrator
or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a
majority of them, and shall be directed to the said person and shall be served in the
same manner as subpoenas to appear and testify before the court; if any person or
persons so summoned to testify shall refuse or neglect to obey said summons, upon
petition the United States district court for the district in which such arbitrators, or
a majority of them, are sitting may compel the attendance of such person or
persons before said arbitrator or arbitrators, or punish said person or persons for
contempt in the same manner provided by law for securing the attendance of
witnesses or their punishment for neglect or refusal to attend in the courts of the
United States.
§ 8. Proceedings begun by libel in admiralty and seizure of vessel or property
If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty,
then, notwithstanding anything herein to the contrary, the party claiming to be
aggrieved may begin his proceeding hereunder by libel and seizure of the vessel or
other property of the other party according to the usual course of admiralty
proceedings, and the court shall then have jurisdiction to direct the parties to
proceed with the arbitration and shall retain jurisdiction to enter its decree upon the
award.
§ 9. Award of arbitrators; confirmation; jurisdiction; procedure
If the parties in their agreement have agreed that a judgment of the court shall be
entered upon the award made pursuant to the arbitration, and shall specify the
court, then at any time within one year after the award is made any party to the
arbitration may apply to the court so specified for an order confirming the award,
and thereupon the court must grant such an order unless the award is vacated,
modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is
specified in the agreement of the parties, then such application may be made to the
United States court in and for the district within which such award was made.
Notice of the application shall be served upon the adverse party, and thereupon the
court shall have jurisdiction of such party as though he had appeared generally in
the proceeding. If the adverse party is a resident of the district within which the
award was made, such service shall be made upon the adverse party or his attorney
as prescribed by law for service of notice of motion in an action in the same court.
If the adverse party shall be a nonresident, then the notice of the application shall
be served by the marshal of any district within which the adverse party may be
found in like manner as other process of the court.
§ 10. Same; vacation; grounds; rehearing
(a) In any of the following cases the United States court in and for the district
wherein the award was made may make an order vacating the award upon the
application of any party to the arbitration--
(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of
them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and
material to the controversy; or of any other misbehavior by which the rights of any
party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them
that a mutual, final, and definite award upon the subject matter submitted was not
made.
(b) If an award is vacated and the time within which the agreement required the
award to be made has not expired, the court may, in its discretion, direct a
rehearing by the arbitrators.
(c) The United States district court for the district wherein an award was made that
was issued pursuant to section 580 of title 5 may make an order vacating the award
upon the application of a person, other than a party to the arbitration, who is
adversely affected or aggrieved by the award, if the use of arbitration or the award
is clearly inconsistent with the factors set forth in section 572 of title 5.
§ 11. Same; modification or correction; grounds; order
In either of the following cases the United States court in and for the district
wherein the award was made may make an order modifying or correcting the
award upon the application of any party to the arbitration--
(a) Where there was an evident material miscalculation of figures or an evident
material mistake in the description of any person, thing, or property referred to in
the award.
(b) Where the arbitrators have awarded upon a matter not submitted to them,
unless it is a matter not affecting the merits of the decision upon the matter
submitted.
(c) Where the award is imperfect in matter of form not affecting the merits of the
controversy.
The order may modify and correct the award, so as to effect the intent thereof and
promote justice between the parties.
§ 12. Notice of motions to vacate or modify; service; stay of proceedings
Notice of a motion to vacate, modify, or correct an award must be served upon the
adverse party or his attorney within three months after the award is filed or
delivered. If the adverse party is a resident of the district within which the award
was made, such service shall be made upon the adverse party or his attorney as
prescribed by law for service of notice of motion in an action in the same court. If
the adverse party shall be a nonresident then the notice of the application shall be
served by the marshal of any district within which the adverse party may be found
in like manner as other process of the court. For the purposes of the motion any
judge who might make an order to stay the proceedings in an action brought in the
same court may make an order, to be served with the notice of motion, staying the
proceedings of the adverse party to enforce the award.
§ 13. Papers filed with order on motions; judgment; docketing; force and
effect; enforcement
The party moving for an order confirming, modifying, or correcting an award shall,
at the time such order is filed with the clerk for the entry of judgment thereon, also
file the following papers with the clerk:
(a) The agreement; the selection or appointment, if any, of an additional arbitrator
or umpire; and each written extension of the time, if any, within which to make the
award.
(b) The award.
(c) Each notice, affidavit, or other paper used upon an application to confirm,
modify, or correct the award, and a copy of each order of the court upon such an
application.
The judgment shall be docketed as if it was rendered in an action.
The judgment so entered shall have the same force and effect, in all respects, as,
and be subject to all the provisions of law relating to, a judgment in an action; and
it may be enforced as if it had been rendered in an action in the court in which it is
entered.
§ 14. Contracts not affected
This title shall not apply to contracts made prior to January 1, 1926.
§ 15. Inapplicability of the Act of State doctrine
Enforcement of arbitral agreements, confirmation of arbitral awards, and execution
upon judgments based on orders confirming such awards shall not be refused on
the basis of the Act of State doctrine.
§ 16. Appeals
(a) An appeal may be taken from--
(1) an order--
(A) refusing a stay of any action under section 3 of this title,
(B) denying a petition under section 4 of this title to order arbitration to proceed,
(C) denying an application under section 206 of this title to compel arbitration,
(D) confirming or denying confirmation of an award or partial award, or
(E) modifying, correcting, or vacating an award;
(2) an interlocutory order granting, continuing, or modifying an injunction against
an arbitration that is subject to this title; or
(3) a final decision with respect to an arbitration that is subject to this title.
(b) Except as otherwise provided in section 1292(b) of title 28, an appeal may not
be taken from an interlocutory order--
(1) granting a stay of any action under section 3of this title;
(2) directing arbitration to proceed under section 4 of this title;
(3) compelling arbitration under section 206 of this title; or
(4) refusing to enjoin an arbitration that is subject to this title.
Filed: 3112/2015 3:21:49 PM
Eloy A. Garcia, District Clerk
Starr County. Texas
Brendaly Guerrero
AU,TOZQ.NE TEXAS. OCC.UPATION:AL
l:NJURY .BE.NEF'fT PLA:N
Effective August ·1, ·2005
{Revis,ed as of AprH 1, 200.8)
SU.MMARY PLAN DES·CRIPTION
NOTICE TO E·~GUSH sPaAKIN~ AVTO~ONERSe. Tbfs b()()klet aantains a S\:lmmJlry :
in English of your plan rights and ~efitJ; u~er ~be .AZTEX A(lv~nt~ge: AutoZcme
Texas Occupationar lnJu.y. Benefit Pl~n. tf ·you have difficulty understahdfng af)y
part of this b'QOklet, .con~ct ~isl< Manager at 123 s. Front Stree~ Memphis, TN
381 f)3, (~01} ~5..6.$0.. Office hours are: frP.m -a;QO a.rn. to '-:OO ·p.ro., l\lt(tnd~V. lhrQugh
Frld,_l~ .
AVISO A LOS E_ MPLJ:ADOS QUE NQ HABLAN 1P.ES;. E,s.te· :fQtkttP ~~U.ne lilO'
resumen .en ln·g les de los derechos y beneficios d~· so plan bajo el. Pl~ de. Lesl~nes
AZTEX Advanta99: :AutoZone Texas Ocupaclonakfs injury eeneflt Plan For ~uas
/\1"fo.Zofl~~\ $1 tl~ne ·ditscultad .e:n .Qnt.-d•r .cu.,lqUltlra par.ta de •s·te folleto,
~-O.nfACf• ·:• · 8.f.llf M,1tn~g:1u· '" ·- ' '.1~3; $.. Front ~sfr~~t; l\n~mphiJ.r TN. 3&.~03, (901.) 495"
6$.(JQ~ :u.~, ~- dQ Ml.a"•·a~m: d.e'$.:tlJJ 11~m. a,~:o.o p~m~, Clt:lurees :• vl•tnea..
RES.OLUTJON 'OF CERTAIN .INJURY-RELATED DISPUTES
AutoZ0n1,:1 =t:t.as. ~PPt~d a ma11d.ator.y ~--~Y req~dring th~• yo.µ $QITTPIY With the following,r.tJsput~
r:esolutiOn r~iternei1~$. · · · ·
Dispute Resplytig!l RsuJulrement·
All' cfaim~ror df$pl)te.s :dE)~.r.lbed bt:11Qw thatt:ari:not otherM$& be resolV~d between Autozorre a~d
yo~ ate subject .to th.e dlspµj~ fltSc;>ft.ttiP-r:•. program de.s.~ribed 1'1 this' Plan. .T~r, pragram ts.
the only method for resolving anv such claim or dispute. · · ·
Claims CbVered By This· Requirement
Thi$ requ(reme,:nt,appUe$ to:
)' any· leg$,{ :or eqµJtat>.te cli;lim .or dtsptJte r~l~'tlog to E!rtfor~m"l'1t pr IQt~rpre.~~tJ.011 :Of fhe.
arbltr~tlon ptovls~~ps Jn an AZTEX Ad;y~n~~ A~knQwJeqgem~m Form .o r this ~rJ.li~idicm
te.q.ufi:em~rtf;: and
)- ~ny letJ~f o.r equitable cla.irn: by or Wl'th re$.pect tQ yo):.ffor ao.yJorm ·Qf;ph~R::al !:>t psyohotO'gical
pamai;ie. ~mi· or d~th wnh;h relaJas ·to an aee!Qent; o.c.ciipa:tipnal dlsease, or ·eumulatlve
t~~npa (incl ~ding,,
·but not limited to, ~lalms of negHgenc~ or gross ·11egHgepce or
discrimination.; and claims for a~ault, battery,, neg.Ii.gent l'iiti.ng/tr:ai)li11g/s1,1p~ry.i5io,YreJ~Mtj!Jn,
,emotional distr~s ,. retaliatory dischar.g~, :o r vloJatlon of any other nonorimlti-al federal1 state .or
otn~r g,avemmental pommon law,; ~tatute, ragul~tlo n or ordinance tn connection with .a Job~
related inju,-yi rega(dless of wh.eth~r the common l~w doctrine wa& .reco.gnlzed or wheijler tht;l
st~ut~. reg·u1atlon or o~inance was en~cted before or after tne effective date of this booJd,et).
This inclu.d~s.. all claims ltsted above that .you have now or in the f uture against AutoZOne, its
officers, directors, owners. AutaZon~rs. repres.~nta.tives, egentsJ St,Jb$idiaiies, afti1iates,
·successors, or as~igns-, This do.e.s· not, hpwev~r. Include any l~gaJ · or equitable ctalm under
e:~JSA ~r ~en~~t$; fldll,pi~cy .b.rea.ch.• Qr o:the.r prpbl$!T1 or: .rel!~f spl~IY. refa.ling to :b.e.n.e~t$ ~~~lf:l.
under this.'Plan.
Th~ d~termtnation of whether a c;taim is co.ver&d by these provisio.ns wi11 .alsO' b-e...subject to.
m.ediijtfQn and ar.bitration qnd.er tht~ df$P.Ute'. ®Qlµtlb.n requ.tterri.eot. Neither·you: nor AulOZont
will be enfilJed 'to. a bench or Jury trial on any claim covered by this dispute resolution
requirement. ThiS dispute resolution requirement apptres. to vou without regard to whether
ypu have.. compieted and sigped an AZT§( Advantage Ackpowltdaement Forinw Tfie=?e
provrs1cms also appjy to :any clatms. that .may be brought by yt>Uf. ·Spotl!:fe'=,, .children!. parents•.
.beneficiaries, -repr:e&er.itativ.es·, executors~ administratots, guardians, heJrs or ass~Q!1$. T he
di$pute resolution p.rovt~tbn.$ :o.f thfs Pla.n=wifl ~ the sof$ ami ~xcl:Clsf'J(:) :r.emedy for r.esolYing any
such c!alm ~f: (ilispµt~;
·e,.cop~1,~eami~So!llte. f(\t,
~IQB 0080
Mediation Prior to Arbitration
If you h'ave:a claim or ~ispute, Y,o.o must first.seek reso.ttitih.n of the ~probTe.m thr6.~.h rrtedlatlon:
before y.o.u request" arbitr.atfon.
Required Notice of AIJ Claims
M.~'(f)~.d.enJ WjtJj ·f1J.spe.ci to subseqµent :Ctatnts ot
.dfsp\.lf~ brought unqe.r1hls arbltratiOn requirement.
Payment of Fees alld.Expenses
». ·Medietion: The:AAA liUng·f~ for me(flatlt>n wilf b:e ,.~t .l~a3t ·$3Z.S. Yo qr $hare c:>f thf~. OQ~t· ~
$5().. Your EmpJoye.r wm pay.the, re.m~Jr:td~r of tbe MA fHing f~e. Y()ur Emlll!~:Yer· wUl' ~l~o
pay. tt}e.Oiea.iat~ir~ ·antlft:J f$e a·~a :i:Jir.tY:O.\~$f·AAA adrnif:'li&tratiw exp:etises~
»· Ar.bitration: Vou ~hall pay a nonref~mdable aif>ltfatlon filing fee equal to the· standard
employee filing fas specified under then-current AAA Employment Arbitration Rules and
Medlatio.n Procedures. Your filing fee- .must be paid when you submit a. request for arbitration
·{or~ Jf this process is ~hallengeitratien Rufes ·c;\nd Meaiation
Proeed\Jres. Aute.Zone wlU also pay the arbitrators entire ·fee and any other AAA
-adm(nistrative expenses: pro.v1ded, bowever that you may elect to aJso pay .up to one~hatf of
these fees and expenses.
• rnhe.·arbttrator ffrrt:fa;,cqm.p(efely. ln your ·f~V9.f on ajl daj.ms«:Aµt()ZQl',l(i! wj)J :re.lrrtb~~~ you for
yol}r·sh~re of t.h,e·filing fe·~. · ·
• If Aut6Zone requests=amitratio11 (by means other 'than a motiO.n In court 10 :com~
arbitration), you Wiii pay nQ JlQrtion o.fthe·AAAor arbitrator fees.
·• Eithe,r, partym$¥ ·arr~ng~ for anq,~Y ~ cofit·of ~ co.urt report~ t('j pr.o.Vfde.fitl. ~tepog~phlc
tecQrd:Qf the pr-Oqeedings~
•. Each party wJl,l also be respon.sibl~ for t:h~ir own attorney's. fee$., Jf any; How~v~r. if any:
party prevails on a. statutory ql~ im whtch allows the preyaj~f'.19 p~(ty to be a.warde9
or
~ttorn~y·s fee~>,;. If there ts a writt~n agreem~nt provi~.iht1 for s.Uch ~s. the a.rb.l~t~r ~
~~td .re$&ot$t;>Je attPfTIE!Y.s fee.s uxt.he·prevalllng party;
•. Ndiwftnstandlng the above pm:v'tslons; the ar:Prtrato:r lMll 3$$~&$ the AAA fi1ing fee, al'P.ltrator
fees and ~~Sn$~s, ·and,.attQmeys fee~ ·~ainst a·party µpon lit•sho~ bV the oth~r party
1haf the first party's els.Im ·is. friv.ci~ou~ or unreasonabl~. or f~~\l.a!IY, or Jegally groun~l~s~;
anc.:i
:> If either !party pursues a claim c.ov.ere.d by this·dispute resolution re.qt1lremettt ~V any. me.ans
d tier'fhan the dl~pUt$. re.solutfon"pt.ov.istbns of thls ·pJan. the·~.espo.ndlng· partywur be:ent1tled to:
'distntssal -of suett actkm. · · · ·
1ntel§!ate eommerce·
.At.rteZooo' le engaged fr1. transactions lhvolv.lng interstate ,commerce {for example> .Pt1rchaslng
·goods, and services from outslde texas whrc.h a(e !$hippe.d ·to Te.xa$ ~nd providing goods ,and.
se.ooaes to custom~; ftcm1.other ~tates:) and your employment lnvolv~s s~ch commeroe. The..
0082
39:
Federal Art>ttratfon Act will gev~m .tfie irjterpre~tlon, .enfarc~t.ne.n~ .~n~ proceec:lio~ 4n~er thfs
a·rbittaffon reqµiremef.lt. Unless. cotitrary to :appUeabfe law, any lawsuits seekl'1Q 10: enroros or
vacate ·ah :a~ration award .shall be bt()tlghi in.the.:United States. i:>Istrtct Court for the-- Northetn
Dlst'rtQt Qf Texas, O~Uas DMsipn.
81!Jding Effect
ThJfl §i:l;>ttra~lory r~qufreme.nt1Pr r~fiQMhg d~!ms by ~n~r ~nnvenf~n~~'- ~P ~ocumentatlpn,. Thi$·Plian ar.ld arb.ltratl<:ln ·requirernent c;ilsp ifl nq ·way ph~nges
t~e "at ~Ill''- employrnen~ sta!tJs of ~ny partlo\pant no! covered ·by a cqllectlve bargalr;i_
ing
.agreement.
AMEN.D:ME.NT OR.TERMINATION OF PLAN
,A~~o.o.~· p~ntty fri(~nd$ to con.tto~ lbe Plan in~efiplt~ly, bQt reserve~ \he righf ·tQ am~ncl.
~~lfyi t~rfr:lin~~ ti\~ ·f>l~n ·at_ :~f1Y tim~; proyi"~d . hQY{e~I\ ij'tat flQ: t>.U~h awenqm.e(lt or
9.f
termination wili after the arbitr.atlan proVl~lo.ns-.of ·the Plan With respectto., ()f': tedue$ the. amount Of'
any b:aneflt pa~ble io. .or·with re.spectto you ond1~r the Plan ·1n rot1nediorfWith, an lhJury-ooootring.
prior t~. the. ,d.at~- ·o f ,suc;h am~ndm,ent or ·t~mirnatlon.. Jn ad.dftfon. ,any such ame.hdniEITTt ot
termfnat!o.n of:tbe-arblt~t1QnJ>fQVh~iQns oflfte, Ptan sball not be effectlv~ untif. at'least 14 d!iys.-a.fb~r·
wrt1t~ Ojl)~Ge ha$-be~o Pl!O~aed tq. yo,u ~ .Any. $1.{qf\ ..ammid.rnen\ o.r te.rr:ntna.~qn Will be :afl.Qp~ed
pursuant ~o form~ written actiqn ofa ~pre$entative a~~o(tzeq ~ act Q_n beh~ff ~f AutqZor:ie..
Q:EFtNfTIONS
Thts Etedion, de.fines.. specific::· temia .use~:f in this b.ooktet the$$ .de.flnltk>ns sh.o.·ulo not be,
lnterprete;d tp e>dend coverage unless :specfflcally provided fi.>r. in:th&«»fher. Se!::tlon>a Of this :bOOkJ~·
an.g thta ·P(~ QQP111.TI!ml
IC)~ 200&.P8,11eettlollico; 1r:1c.
ReY.Y
-Mail 2lll CQJiyrtnSSC
-Send 3rd copy·to 1bc Rcaionu~l'UU1f~Tl!!&¢r·
n·T~$,AoVANTAGE A'(:fand ~aptf~e{f par.tl9lpat~, In·e!'}Y ~mp~ny ~ety irsl?lrtg programs.
1
ARBIT'RATIOU. .1also ael