Elahi v. Valuebank Texas

Filing 18

ORDER denying 17 Motion for Judicial Intervention..(Signed by Judge Hilda G Tagle) Parties notified.(mserpa, 2)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
FAIYAZ ELAHI,

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Plaintiff,
VS.
VALUEBANK TEXAS,
Defendant.

June 27, 2017
David J. Bradley, Clerk

CIVIL NO. 2:17-CV-74

ORDER
The Court is in receipt of Defendant ValueBank Texas (“VBT”)’s Motion for
Judicial Intervention Regarding June 15, 2017 Order, Dkt. No. 17.
In its June 15, 2017 Order, this Court granted VBT’s motion to compel
mediation and arbitration in this employment discrimination action brought by
former VBT employee Faiyez Elahi (“Elahi”). See Dkt. No. 16. Specifically, on
review of the “Alternate Dispute Resolution” agreement (the “Agreement”) signed
by the parties pursuant to Elahi’s former employment at VBT, the Court found that
the Agreement’s fee-splitting provision, contained in its arbitration clause, was not
substantively unconscionable and did not render the clause or the Agreement
invalid. Id. The Court also noted it was in agreement with the parties that the
Agreement is governed by the Federal Arbitration Act (“FAA”) and mandates
arbitration of Elahi’s Title VII claims. Id. Finally, the Court observed that the
Agreement “specifies that the parties agree to use mediation procedures before
pursuing arbitration,” contains specific procedures for appointing an arbitrator, and
states that arbitration shall be conducted “in accordance with” American
Arbitration Association (AAA) rules. Id.
VBT’s instant motion informs the Court that on June 16, 2017, the day
following entry of this Court’s prior Order, Elahi filed a Demand for Arbitration
with the AAA. Dkt. No. 17 at 2. VBT argues that the Court’s prior Order precluded
this action, because it demonstrated that “the Court clearly agreed with Defendant’s
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position that there was no requirement that the arbitration be administered by the
[AAA.]” Id. at 3. The Court’s prior Order did not state this proposition directly, but
instead considered, as one non-dispositive factor, the relative impact of an AAAadministered arbitration in ruling on Elahi’s argument as to the substantive
unconscionability of the fee-splitting provision of the Agreement’s arbitration
clause. Concededly, however, the prior Order perhaps improperly suggested that
Elahi’s argument that the Agreement mandates an AAA-administered arbitration
was in conflict with the Agreement’s provision concerning the selection of an
arbitrator.
For clarity of record, the Court notes that Fifth Circuit precedent establishes
that where parties have, as here, agreed to submit “all” disputes arising out of an
agreement to arbitration, they “commit a broad scope of questions” to arbitration.
Pedcor Management Co., Inc. Welfare Benefit Plan v. Nations Personnel of Texas,
Inc., 343 F.3d 355, 359 (5th Cir. 2003); Vallejo v. Garda CL Southwest, Inc., 948
F.Supp.2d 720, 726 (S.D. Tex. 2013) (“In accordance with a valid delegation clause,
questions of arbitrability. . . must go to an arbitrator.”) In such cases it is for the
arbitrator to decide disputes between the parties as to how an arbitration shall be
administered,1 and whether a condition precedent to arbitration has occurred. See
Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452-53 (2003); see also Howsam v.
Dean Witter Reynolds, Inc., 537 U.S. 79, 85 (2002).
For the foregoing reasons, the Court DENIES ValueBank Texas’s Motion for
Judicial Intervention, Dkt. No. 17.
SIGNED this 26th day of June, 2017.

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Hilda Tagle
Senior United States District Judge
Additionally, courts “interpret clauses providing for arbitration ‘in accordance with’ a particular set
of rules as forum selection clauses.” PoolRe Ins. Corp. v. Organizational Strategies, Inc., 783 F.3d
256, 264 (5th Cir. 2015).
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