The Houston [1st] Court of Appeals has affirmed a trial court order compelling arbitration of an employee’s claim that her employer breached an agreement settling the employee’s claims involving a sexual assault by another employee.
Jane Doe v. Occidental Petroleum Corp. (01-23-00196-CV; August 29, 2024) arose from a 2015 sexual assault of Doe by an Oxy employee. Doe sued Oxy, resulting in the employee’s dismissal from the company. Doe and Oxy then entered into a Settlement Agreement under which Oxy agreed to 1) pay Doe $45,000 for attorney fees, 2) not take any adverse action against Doe because of the assault, lawsuit, or agreement, and 3) reimburse Doe for any payments for treatment arising from the assault the next two years after the agreement. In exchange, Doe agreed to release her claims against Oxy. The agreement also contained a forum selection clause providing that any lawsuit arising from the agreement should be tried in state and federal courts.
Doe continued to work for Oxy, and in 2016, Oxy granted her two units of stock as part of a long-term incentive plan. Oxy gave the stock grants to Doe by way of an Award Agreement that contained an arbitration provision. The arbitration provision was in all caps and bolded. Accepting the stock grants required Doe to electronically sign the Award Agreement by opening it and re-entering a password. Doe resigned later in 2016 and sued Oxy in trial court. She alleged that Oxy breached the Settlement Agreement by not paying some of her medical expenses related to the assault and by subjecting her to adverse employment actions. Oxy moved to compel arbitration. The trial court granted the motion. The arbitrator ruled that Doe’s claims were subject to the Award Agreement’s arbitration provision and that Oxy was entitled to summary judgment because Doe provided no evidence that Oxy engaged in any adverse employment actions or failed to pay her medical expenses. Doe moved to vacate the arbitrator’s decision, arguing that there was no agreement to arbitrate and that the parties instead had a forum selection clause that required the dispute to be pursued in courts. The trial court denied her motion and approved the arbitrator’s decision. Doe appealed
In an opinion by Justice Hightower, the court of appeals affirmed. The court determined that Oxy offered the stock grants, Doe accepted and followed the procedure by electronically accepting the stock grants, and Oxy executed the stock grants, thus fulfilling all of the terms of a contract. Doe maintained that she did not sign the Award Agreement, but Oxy provided evidence that there was no way that Doe could have accepted the Award without providing an Electronic Signature by re-entering her password. Doe denied that she ever signed or accepted the stock grant’s terms and conditions, but her mere declaration does not explain how the electronic acceptance could have occurred otherwise. Doe complained further that the arbitration provision was set out in boilerplate language, but the appellate court held that “a party who can read a contract containing an arbitration agreement and signs it, knows its contents.” Furthermore, the arbitration provision was the only provision in bold and capital lettering, so it was not hidden.
The court of appeals then turned to the question of whether the arbitration agreement applied to Doe’s claims. The agreement stated that “[a]ny dispute arising out of or in any way related to the Grantee’s employment with the Company, or the termination of that employment, will be decided exclusively by final and binding arbitration pursuant to any procedures required by applicable law.” It provided firther that “[a]ny controversy regarding whether a particular dispute is subject to arbitration under this section 21 shall be decided by the arbitrator.” Doe argued that another clause, which provided that “[i]n the event of any inconsistent provisions between the Award Agreement and any employment agreement between the Grantee and the Company, the provisions of the Award Agreement control, except with respect to [arbitration provision] below,” created an exception to arbitration. The court of appeals however, determined that Doe’s Settlement Agreement did not address her compensation, term of employment, or duties, and so does not count as an employment agreement.
Doe next contended that the forum selection clause was enforceable and that Oxy failed to prove the elements of a novation in the Settlement Agreement and breached its contract with her by not paying her medical expenses in a timely manner. The court of appeals rejected this argument as well, concluding that when confronted with the conflicting provisions of a forum selection clause and an arbitration provision, a valid arbitration provision that delegates arbitrability to the arbitrator takes precedence. What matters to the courts was whether Oxy proved that Doe’s claims fell within a valid arbitration agreement, which they did. The court thus affirmed the trial court’s ruling.
TCJL Intern Dilara Muslu provided the research and drafting for this article.
