Defendant's standard brief in support of motion to compel arbitration, dismiss and stay proceedings (State Court)

[Style of Case]

BRIEF IN SUPPORT OF DEFENDANT'S MOTION TO COMPEL

ARBITRATION AND TO DISMISS AND STAY ALL PROCEEDINGS

I. INTRODUCTION

This matter is before the Court pursuant to Defendant's Motion to Compel Arbitration and to Dismiss and Stay All Proceedings. Plaintiff, _____ (hereafter "Plaintiff"), and Defendant, _____ (hereafter "Defendant" or "_____") were subject to a written agreement to submit the subject matter of this lawsuit to binding arbitration. This agreement is enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA"). Accordingly, Defendant moves to compel arbitration and to dismiss this lawsuit.

II. STATEMENT OF FACTS

A. Relationship Between the Parties

Plaintiff was employed by Defendant from approximately _____ through approximately _____. Plaintiff worked in Defendant's_____ office as a _____.

B. The Arbitration Agreement

[OPTION:]

The Defendant signed an arbitration agreement on _____.¹ The Plaintiff signed said arbitration agreement on _____.²

[OPTION:]

By memo from _____, dated _____, all _____ employees, including Plaintiff, were notified of the employee dispute resolution program which began _____.³ This program included mandatory binding arbitration. The memo was sent to Plaintiff at _____.⁴

Said arbitration agreement provides:

C. Plaintiff’s Voluntary Termination From Employment With

Plaintiff voluntarily quit [his/her] job with Defendant on or about _____.

D. Plaintiff's Claims

Plaintiff's First Amended Original Petition alleges _____ cause(s) of action against Defendant, including _____.

E. Lawsuit and Demand for Arbitration Made and Rejected

Despite the Arbitration Agreement noted above, and in violation of it, Plaintiff filed this lawsuit against Defendant on _____. On _____, Defendant's attorney made a demand upon Plaintiff's attorney for arbitration, which was rejected.⁵ Further, Plaintiff currently wishes to maintain this lawsuit despite, and in violation of, Defendant's demand for arbitration.

Every claim in Plaintiff's First Amended Original Petition arises out of the employment relationship between the parties or the termination of same. Nevertheless, to date, Plaintiff has refused to comply with the arbitration agreement.

III. ARGUMENT

A. The Texas Legislature and

The Texas Courts Favor Arbitration

Texas law strongly favors arbitration.⁶ As the Texas Supreme Court has stressed, "We have recently reiterated the strong policy preference for enforcing arbitration clauses."⁷

Indeed, Texas courts recognized arbitration agreements at least as early as Texas' first state constitution in 1845.⁸ Although Chapter 171 of the Texas Civil Practices and Remedies Code provides for the enforcement of arbitration agreements in Texas, including arbitration of employment disputes, the arbitration provision at issue here is governed, instead, by the FAA.

B. The Standards and Law Applicable to this Motion

1. Federal Law Controls

Under the Supremacy Clause of the United States Constitution, the FAA preempts all otherwise applicable state laws, including the TGAA.⁹ Thus, Texas courts routinely enforce arbitration clauses that fall within the scope of the FAA.¹⁰

When deciding if disputed claims fall within the scope of an arbitration clause, Texas courts apply Texas procedural law and federal substantive law.¹¹ Accordingly, federal interpretive decisions control a Texas court's decision of whether or not to compel arbitration pursuant to the FAA.¹² The Texas Supreme Court has held "the issue of whether a party is bound by an arbitration clause is determined by federal law."¹³ As the Texas Court of Appeals in Austin noted:

Irrespective of state court decisions regarding the construction of arbitration clauses, all such clauses . . . subject to the [FAA] must be interpreted in light of federal case law.¹⁴

2. The Test for Compelling Arbitration

In determining whether or not to compel arbitration of an employment dispute, a court must determine whether the FAA is applicable. This involves an analysis of whether or not interstate commerce was involved.¹⁵ If so, the FAA applies.

With that established, a motion to stay pending arbitration requires a determination of only two issues:

(1) Whether there is an enforceable agreement to arbitrate; and

(2) If so, whether the claims asserted in the litigation fall within the scope of that agreement.¹⁶

The Standard for Deciding

Whether to Compel Arbitration

In deciding whether to compel arbitration, courts should consider the case law recognizing a strong presumption in favor of arbitration. The U.S. Supreme Court has held that the FAA "is a congressional declaration of a liberal policy favoring arbitration agreements."¹⁷ The U.S. Supreme Court has also noted that this policy favoring arbitration requires the enforcement of arbitration agreements wherever possible, stating:

Questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration. . . . The arbitration act establishes that, as a matter of law, any doubts concerning the scope of the arbitrable issue should be resolved in favor of arbitration, whether the problem at hand is a construction of the contract language itself or an allegation of waiver, delay or a like defense to arbitrability. ¹⁸

The Supreme Court has long recognized that the presumption favoring arbitration means a court should compel arbitration unless there is evidence positively indicating that arbitration should not be compelled. As the Texas Court of Appeals has held "in construing the language of the arbitration clause, we employ a heavy presumption in favor of arbitration."¹⁹ This presumption requires Texas courts "to decide any reasonably debatable question of interpretation in favor of arbitration."²⁰

Finally, public policy strongly favors enforcement of arbitration provisions. The Supreme Court has recognized a strong federal policy in favor of arbitration:

Congress declared a national policy favoring arbitration and withdrew the power of the state to require a judicial forum for the resolution of claims which the parties agreed to resolve by arbitration.²¹

As such, this congressional policy "requires that [the courts] rigorously enforce agreements to arbitrate."²²

C. The FAA Applies to the Parties

The FAA applies to all written agreements which contain an arbitration provision involving activities that affect "interstate commerce" in the broadest sense of the term.²³ Whether an employee's activities involve interstate commerce is broadly construed.²⁴ Congress intended the FAA's application to commerce be co-extensive with Congress' authority to regulate pursuant to the Commerce Clause.²⁵

Plaintiff's employment was clearly "a...