El Paso COA Orders Workers’ Compensation Non-Subscriber Negligence Lawsuits to Arbitration

Texas’ Eighth District Court of Appeals has ruled that a boot manufacturer may require its workers to arbitrate their workplace injury claims under a provision included in the workers’ employment contract. In Lucchese Boot Co. et al. v. Licon, No. 08-14-00228-CV, Lucchese Boot Co. et al. v. Solano, No. 08-14-00229-CV, and Lucchese Boot Co. et al. v. Rodriguez, No. 08-14-00230-CV, (Tex. App. – El Paso, July 29, 2015), several workers filed various negligence complaints against their employer, boot manufacturer Lucchese Inc., in El Paso. Although such personal injury cases would typically be subject to the Texas workers’ compensation law, Lucchese is a non-subscriber to the program.

In their lawsuits, the workers sought damages for their on-the-job accident harm. In response to the lawsuits, Lucchese unsuccessfully sought to compel arbitration under the terms of the company’s Benefits Injury Plan. After that, the boot manufacturer argued the disputes should be arbitrated under its Problem Resolution Program. The 34th District Court of El Paso County denied the employer’s motion and the company filed an interlocutory appeal with the El Paso appellate court.

The appeals court first stated the gateway issue regarding whether the cases were subject to arbitration was reserved for the courts despite that the arbitral agreement incorporated the rules of the Texas Arbitration Mediation Services due to the limited scope of the arbitration provision. Next, the court found that the workers waived their claim that the agreement to arbitrate was illusory since they failed to explain what rendered it so on appeal.

The Court of Appeals then ruled that an enforceable arbitral agreement existed. The El Paso court stated the terms of the Problem Resolution Program were “definite, ascertainable, and not subject to more than one reasonable interpretation.” The court also said the Program did not conflict with the material terms of the employees’ Benefit Plan. The court added that the employees,

…failed to provide evidence that the claims … presented would otherwise be excluded from coverage because they were subject to the Benefits Plan. As such, we find that both prongs of the arbitration test have been met: an arbitration agreement exists, and the dispute between the parties falls within its ambit. See Delfingen, 407 S.W.3d at 797. The trial court could not refuse to enforce the arbitration agreement on any defective formation grounds.

The El Paso court next stated the workers failed to provide evidence the agreement to arbitrate was unconscionable. The appellate court also rejected the employees’ argument that the boot manufacturer was estopped from seeking to compel arbitration under the Problem Resolution Program since the company unsuccessfully sought to compel arbitration under the Benefit Plan.

Because Lucchese established that a binding arbitration agreement that was not subject to any valid defenses existed, Texas’ Eighth District Court of Appeals in El Paso reversed the trial court’s order denying the boot manufacturer’s motion to compel arbitration and remanded the case.

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