Justice Patricia Alvarez

In an opinion by Justice Alvarez, the San Antonio Court of Appeals has reversed a trial court order denying an employer’s motion to compel arbitration in a whistleblower situation.

SSC Wimberley Operating Company, LLC v. Goodman (No. 04-22-00355-CV; filed January 11, 2023) arose from the termination of a nursing facility employee’s employment following a report to HHSC in which she accused the facility of “extreme patient neglect.” When she accepted employment, the employee signed a copy of the Employment Dispute Resolution Programs Agreement, in which she agreed that “all claims, controversies or disputes relating to my application for employment, my employment, my employment and/or termination of employment with the Company exclusively through the Company’s Employment Dispute Resolution Programs Agreement.” The policy required arbitration of disputes under the Federal Arbitration Act. She also signed an acknowledgement that she understood and accepted the policy. The employee sued the facility, its owner and affiliates, and several employees alleging that she was terminated for reporting facility conditions to HHSC. The defendants moved to abate the proceedings and to compel arbitration, which the trial court denied. The defendants appealed.

The court of appeals reversed. It determined that the employee had signed a valid arbitration agreement and that her claims were within the scope of the agreement. The employee tried to argue that the agreement was unenforceable because it did not identify the facility (it referred to the “Company) and that neither the facility nor the employees named in her complaint signed the agreement. Brushing these arguments aside, the court of appeals noted that “the FAA does not require arbitration agreements to be signed to be enforceable” (citations omitted). It further observed that “when an agreement between two parties clearly provides for the substance of a dispute to be arbitrated, one cannot avoid it by simply pleading that a nonsignatory agent or affiliate was pulling the strings” (citations omitted). Finally, the employee contended that the agreement was unconscionable because it required confidentiality of proceedings and documents and thus violated her free-speech rights. The court, however, rejected the argument because the employee failed to carry her burden to show unconscionability, cited no Texas authority, and failed to show “how the confidentiality provision makes the arbitral form an inadequate or inaccessible substitute” (citation omitted).

Clearly, the employee had an extremely weak case, but the court of appeals still had to hear it and issue an opinion explaining why it was so weak. We find this case interesting because it demonstrates once again that though some trial courts continue to refuse to compel arbitration, the intermediate appellate courts nearly always reverse them, whether in Amarillo, Dallas, Austin, or San Antonio. This is a good sign that those courts are functioning the right way and producing uniform interpretations of well settled case law.

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