Rocha v. Macy's Retail Holdings, Inc. et al
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS MOTION TO ABATE AND COMPEL ARBITRATION. ORDER DENYING 24 Motion to Compel. Signed by Judge Philip R. Martinez. (scf)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
MACY’S RETAIL HOLDINGS,
AND ORDER DENYING DEFENDANT’S
MOTION TO ABATE AND COMPEL ARBITRATION
On this day, the Court considered Defendant Macy’s Retail
Holdings, Inc.’s [hereinafter, “Defendant”] “Motion to Abate and to
Compel Arbitration” (ECF No. 24) [hereinafter “Motion”], filed on
August 3, 2017, Plaintiff Christine Rocha’s [hereinafter “Plaintiff”]
“Response in Opposition to Defendant’s Motion to Abate and Compel
Arbitration” (ECF No. 27) [hereinafter “Response”], filed on August 15,
2017, and Defendant’s “Reply in Support of its Motion to Abate and to
Compel Arbitration” (ECF No. 29) [hereinafter “Reply”], filed on August
22, 2017, in the above-captioned cause.
After due consideration, the Court is of the opinion that
Defendant’s Motion should be denied for the reasons that follow.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff filed her “Original Petition” in Texas state court on
January 31, 2017. Not. Removal Ex. A, Mar. 13, 2017, ECF No. 1. After
Defendant removed the case to federal court, Plaintiff filed an amended
complaint on May 18, 2017 pursuant to the Court’s “Standing Order to
Replead in Removed Cases.” See Pl.’s Compl. of May 18, 2017, ECF No.
18 [hereinafter “Amended Complaint”]. In her Amended Complaint,
Plaintiff alleges that she suffered an injury while she was employed by
Defendant. Am. Compl. 2. Plaintiff alleges that she and another
employee both worked at the jewelry department at Defendant Macy’s.
Id. Plaintiff avers that the other employee held “the doors of the cabinet
while Plaintiff was on her knees filling in jewelry. The employee struck
Plaintiff with the jewelry door causing Plaintiff to get injured.” Id. As a
result, Plaintiff sued Defendant for negligence and premises liability.
Id. at 3–4.
On August 3, 2017, Defendant moved to abate this matter and
compel Plaintiff’s claims to arbitration. Mot. 1. As an employer that
does not voluntarily subscribe to Texas’s workers’ compensation
insurance system, Defendant has its own “Injury Benefit Plan for Texas
Employees” [hereinafter “Plan”]. Id. at 2. Pursuant to the Plan, “all
claims and disputes pertaining to work-related injuries as described by
the Plan are subject to final and binding arbitration.” Id. at 3. An
employee automatically “becomes an eligible participant” in the Plan if
they are “employed in the regular business of, and receive[ ] pay by
means of a salary, wage or commission directly from, Macy’s.” Id. at 5.
Defendant claims Plaintiff “automatically became a participant in the
Plan” when it hired her. Id. The Summary Plan Description [“SPD”],
which Defendant alleges all Macy’s employees either receive a copy of or
“have access to,” provides that “any legal or equitable claim . . . for any
form of physical . . . harm which relates to an accident . . . including, but
not limited to, claims of negligence” is subject to arbitration. Id.
Plaintiff argues she “did not receive any notice of the purported
agreement” and thus that any such agreement is not enforceable. 1 Mot.
Plaintiff makes numerous other arguments in her lengthy Response
regarding why the Court should decline to compel arbitration in this
case. See generally Resp. Because the Court concludes that without
notice, no valid agreement can exist, and further finds that Defendant
has not shown that Plaintiff received notice of the arbitration provision,
the Court will not address Plaintiff’s remaining arguments.
When considering a motion to compel arbitration under the
Federal Arbitration Act (“FAA”), courts employ a two-step analysis.
“First, a court must ‘determine whether the parties agreed to arbitrate
the dispute in question.’” Tittle v. Enron Corp., 463 F.3d 410, 418 (5th
Cir. 2006) (quoting Webb v. Investacorp., Inc., 89 F.3d 252, 258 (5th Cir.
1996)). “Second, a court must determine ‘whether legal constraints
external to the parties’ agreement foreclosed the arbitration of those
claims.’” Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th
Cir. 2002) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
473 U.S. 614, 628 (1985)).
The first step of the analysis—whether the parties agreed to
arbitrate the dispute in question—consists of two distinct prongs:
“(1) whether there is a valid agreement to arbitrate between the parties;
and (2) whether the dispute in question falls within the scope of that
arbitration agreement.” Id. at 418─19 (quoting Webb, 89 F.3d at 258).
“[I]n determining whether the parties agreed to arbitrate a certain
matter, courts apply the contract law of the particular state that governs
the agreement.” Washington Mut. Fin. Grp., LLC v. Bailey, 364 F.3d
260, 264 (5th Cir. 2004). By citing primarily Texas state law, both
parties indicate their agreement that Texas law governs the validity of
the contract at issue.
Here, Plaintiff argues that there was no valid arbitration
agreement because she did not receive notice of any such agreement,
sign the agreement, or consent in some other way to arbitration. Resp.
4–5. If the Court decides that no valid arbitration agreement exists, it
need not proceed further to determine issues about the scope of the
agreement or whether other legal principles foreclose arbitration.
“Arbitration under the [FAA] is a matter of consent, not coercion.”
Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ.,
489 U.S. 468, 469 (1989). “[T]he FAA ‘does not require parties to
arbitrate when they have not agreed to do so,’ and its purpose is to make
arbitration agreements ‘as enforceable as other contracts, but not more
so.’” Weekley Homes, L.P. v. Rao, 336 S.W.3d 413, 419 (Tex. App.—
Dallas 2011, pet. denied) (quoting Roe v. Ladymon, 318 S.W.3d 502, 510
(Tex. App.—Dallas 2010, no pet.)). Although public policy favors
arbitration, arbitration is also a creature of contract. In Estate of
Guerrero, 465 S.W.3d 693, 703 (Tex. App.—Houston [14th Dist.] 2015,
pet. denied) (citing In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex.
App.—El Paso 2004, orig. proceeding)). Thus, “[i]n deciding whether the
parties have agreed to arbitrate, we do not resolve doubts or indulge a
presumption in favor of arbitration.” Id.
“Similar to a motion for summary judgment, and subject to the
same evidentiary standards, the party alleging an arbitration agreement
must present summary proof that the dispute is subject to
arbitration . . . and the party resisting arbitration may contest the
opponent’s proof or present evidence supporting the elements of a
defense to enforcement.” Doe v. Columbia N. Hills Hosp. Subsidiary,
L.P., 521 S.W.3d 76, 81 (Tex. App.—Forth Worth 2017, pet. filed). “To
establish [that] a valid arbitration agreement exists, an employer must
show the employee received notice of the employer’s arbitration policy
and accepted it.” Big Bass Towing Co. v. Akin, 409 S.W.3d 835, 838
(Tex. App.—Dallas 2013, no pet.). The Texas Supreme Court has
“stressed the importance of notice” to the employee of an employer’s
arbitration policy. In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d 161,
162 (Tex. 2006). If an employer seeking to compel arbitration does not
provide sufficient evidence that the employee received notice of an
arbitration policy, the employer’s motion to compel arbitration pursuant
to that policy may be denied. See Akin, 409 S.W.3d at 841–42
(upholding denial of an employer’s motion to compel arbitration where
the employer failed to adduce sufficient proof that its employee had
notice of its arbitration policy).
The Court finds that Defendant has not produced sufficient
evidence to carry its burden of showing that Plaintiff was put on notice
of Macy’s arbitration policy. As an initial matter, the Agreement that
Defendant attached to its Motion as Exhibit A-1 is not signed by either
party. “Under standard contract principles, the presence or absence of a
party’s signature on a written contract is relevant to determining
whether there was an intent for an agreement to be binding.” Firstlight
Fed. Credit Union v. Loya, 478 S.W.3d 157, 167 (Tex. App.—El Paso
2015, no pet.) (citing Wright v. Hernandez, 469 S.W.3d 744, 756 (Tex.
App.—El Paso 2015, no pet.)). While “the FAA does not require that the
agreement be signed by both parties[,]” id. (citing In re Bunzl, 155
S.W.3d at 210), the Defendant still has the burden of providing some
other evidence “to prove the party unconditionally and mutually
assented to the terms of the contract[,]” Lujan v. Alorica, 445 S.W.3d
443, 448–49 (Tex. App.—El Paso 2014, no pet.); see also Akin, 409
S.W.3d at 841–42 (holding that the plaintiff had not received notice of
and thus had not assented to an arbitration agreement where he had
signed other documents that incorporated the agreement by reference
but had never seen or heard of the arbitration agreement and did not
sign the actual document).
First, Defendant never specifically alleges that Plaintiff received a
copy of the arbitration agreement when she was hired. Instead,
Defendant claims “Plaintiff was provided [with the SPD] as a new
employee (or, in the alternative, . . . Plaintiff had ample access to [the
SPD] via the Human Resources Department)[.]” Mot. 5. Defendant
implies that even if it did not provide Plaintiff with the SPD (which
Defendant admits is a possibility), Plaintiff’s ability to affirmatively
request the document from Human Resources constitutes “notice” of the
arbitration provision sufficient to create a binding contract between the
employer and employee. Mot. 4. The Court disagrees. “The fact that a
document was ‘available’ for inspection does not demonstrate that [an
employee] had notice of the document.” Akin, 409 S.W.3d at 842; Doe,
521 S.W.3d at 82 (“[M]erely posting an arbitration policy on an intranet
site is insufficient to give an employee notice.”). Thus, Defendant must
provide evidence that it gave Plaintiff actual notice of its arbitration
policy, not merely that it had copies of the policy available that
employees could request from Human Resources.
To that end, Defendant provides a lone affidavit from one “Gabriel
Serrano” to attempt to show that Plaintiff was given a copy of the SPD
at some point during her employment. Mot. Ex. A. That affidavit
[hereinafter “Serrano Affidavit”] suggests that “all newly hired
employees” receive a copy of Macy’s Injury Benefit Plan and
accompanying Plan Description. Mot. Ex. A at 2. Gabriel Serrano avers
specifically that Plaintiff “Christine Rocha was provided with a copy of
the Macy’s, Inc. Injury Benefit Plan for Texas Employees Summary Plan
Description [SPD] during her employment with Macy’s.” Id.
The Serrano Affidavit contains the only explicit statement that
Plaintiff actually received the SPD upon being hired. However, it is
unclear to what extent Defendant adopts that claim in its Motion
because of its equivocal statement regarding whether Plaintiff received
the documents or merely had “access” to them via Human Resources.
Mot. 5. Nonetheless, construing Defendant’s argument generously and
assuming it adopts this statement in the Serrano Affidavit, “[a]n
affidavit must disclose the basis on which the affiant has personal
knowledge of the facts asserted.” Akin, 409 S.W.3d at 841 (citing Radio
Station KSCS v. Jennings, 750 S.W.2d 760, 762 (Tex. 1988)). “Affidavits
not based on personal knowledge are not competent evidence; the
affidavit must affirmatively show a basis for such knowledge.” Id.
(citing Southtex 66 Pipeline Co. v. Spoor, 238 S.W.3d 538, 542–43 (Tex.
App.—Houston [14th Dist.] 2007, pet. denied)).
Here, the Serrano Affidavit provides absolutely no detail regarding
who Gabriel Serrano is. The affidavit simply states that he has
“personal knowledge of the matters set forth in this affidavit.” Mot. Ex.
A at 1. The affidavit is devoid of basic factual support or context, such
as where or with whom Mr. Serrano is or was employed, how he relates
to the subject matter of this litigation, how he knows about Defendant’s
company policies, or how he knows that a specific employee received
specific documents at a specific time. Defendant’s Motion cites the
affidavit just once and provides no further detail. Thus, the Serrano
Affidavit fails to affirmatively show any basis for Mr. Serrano’s
purported personal knowledge. The Court accordingly concludes that
the Serrano Affidavit is not competent evidence. See Akin, 409 S.W.3d
at 841–42 (finding an affidavit not to be competent where the affiant
claimed the plaintiff received notice of arbitration at a meeting but
failed to describe how the affiant’s position as “custodian of records” gave
her knowledge of such a meeting, “what the substance of the discussion
at the meeting was, how she otherwise might have come to know the
substance of the meeting, who attended the meeting, or . . . whether [the
plaintiff] was at the meeting”).
In its Reply, Defendant argues that “the Plaintiff does not deny
reviewing the Benefit Plan and does not deny signing Macy’s New
Higher [sic] Acknowledgement[,]” she “only claims not to ‘remember’
signing the acknowledgement.” Reply 3. Further, Defendant claims
that Plaintiff has provided “no evidence that there was not a meeting of
the minds at the time of Plaintiff’s employment.” Id.
Defendant’s argument is unconvincing. It is true that Plaintiff has
provided a sworn statement that “she signed several documents” when
she was hired. Resp. Ex. 5 at 2. However in that same statement, she
claims she “never read Defendant MACY’S Summary Plan Document[,]”
was not informed that the Summary Plan Document was available to
her, “was not aware that she was agreeing to arbitration[,]” and “did not
intend nor consent to [her] claim arising out of a work place injury to be
subject to any arbitration agreement.” Resp. Ex. 5 at 2. At best,
Defendant has shown that Plaintiff “signed several documents” but does
not remember whether she signed the SPD. However, it is not Plaintiff’s
burden to prove she did not agree to arbitration. Quite the contrary,
Defendant must convince the Court that Plaintiff did assent to
arbitration. It is of no consequence that Defendant does not remember
whether she signed any such agreement or that she cannot affirmatively
prove that she did not agree. Rather, Defendant must come forth with
competent and credible evidence that allows the Court to make a
determination that such an agreement does exist.
Here, in attempting to satisfy its burden, Defendant has provided
the Court with the following documents: (1) a forty-eight-page Summary
Plan Description containing an arbitration provision on page thirty-eight
and a blank signature page on Appendix B (titled “Receipt, Safety
Pledge, and Arbitration Acknowledgement”); and (2) an unreliable
affidavit from an unidentified individual who claims to have personal
knowledge that Plaintiff received this document. This is insufficient
evidence for the Court to conclude that Plaintiff received notice of any
arbitration provision, and thus “unconditionally and mutually assented
to the terms of the contract.” 2 Lujan, 445 S.W.3d at 448–49.
Finally, even if there was no initial notice, Defendant argues that
Plaintiff’s acceptance of Plan benefits after her workplace injury “also
evidences Plaintiff’s agreement to the arbitration provisions of the Plan.”
Mot. 5. This argument also fails. “Ratification occurs if a party
recognizes the validity of a contract by acting or performing under the
contract or by otherwise affirmatively acknowledging it.” Akin, 409
S.W.3d at 842 (citing Barrand, Inc. v. Whataburger, Inc., 214 S.W.3d
122, 146 (Tex. App.—Corpus Christi 2006, pet. denied)). “In order for
ratification to be applicable it must be shown that the person ratifying
did so with knowledge of the facts.” Id. (citing Norman v. Safway
Products, Inc., 404 S.W.2d 69, 71 (Tex. Civ. App.—Dallas 1966, no writ)).
There is some Texas law suggesting that where there is a genuine
question of material fact concerning the existence of an agreement, trial
courts “must conduct an evidentiary hearing to resolve the disputed
material facts.” See In Estate of Guerrero, 465 S.W.3d 693, 703 (Tex.
App.—Houston [14th Dist.] 2015, pet. denied). However, neither party
in this case has requested such a hearing, nor have they addressed the
applicability of that state procedural rule to a federal district court.
Therefore, the Court declines to hold such a hearing.
Here, Defendant points to no evidence that Plaintiff had any knowledge
of the arbitration agreement when she accepted Plan benefits. Thus,
Defendant’s argument that Plaintiff ratified the arbitration agreement
by accepting benefits under the Plan is not supported by law. See id.
(“[T]here is nothing in the record to show [Plaintiff] had any knowledge
of the arbitration agreement when he accepted benefits under the
occupational injury benefit plan . . . . [T]hus[,] [Defendant] failed to show
that [Plaintiff] ratified the arbitration agreement by accepting medical
and indemnity benefits.”).
For the foregoing reasons, the Court will deny Defendant’s Motion.
Accordingly, IT IS ORDERED that Defendant Macy’s Retail
Holdings, Inc.’s “Motion to Abate and to Compel Arbitration” (ECF No.
24) is DENIED.
SIGNED this 3rd day of October, 2017.
PHILIP R. MARTINEZ
UNITED STATES DISTRICT JUDGE
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