Kimberly Huckaba v. Ref-Chem, L.P.
Opinion
Kimberly Huckaba, a former employee of Ref-Chem, L.P., appeals the district court's judgment compelling arbitration. Because the express language of the agreement at issue requires for it to be signed by both parties and because it is undisputed that Ref-Chem did not sign the agreement, we REVERSE and REMAND.
I.
Huckaba sued her former employer, Ref-Chem, in federal district court. Ref-Chem moved to dismiss and compel arbitration.
*688 In support of its motion, Ref-Chem provided the court with an arbitration agreement that had been signed by Huckaba. Next to Huckaba's signature is a signature block for Ref-Chem. Ref-Chem, however, did not sign the agreement.
The agreement provides that:
The organization referred to above ("Employer") and the Employee, whose signature is affixed hereto, ("Employee"), mutually recognize that there are many advantages to using mediation and arbitration to settle any and all legal disputes and claims, including, but not limited to, all those arising from or in the course of employment. ... In consideration of these many benefits, the mutual agreement of both parties to the binding arbitration provisions, the continuation of the employment relationship and other consideration, the sufficiency of which is hereby acknowledged by Employee, the parties hereto mutually agree that this document shall govern the resolution of all claims and disputes between them.
In addition, the agreement states that "[b]y signing this agreement the parties are giving up any right they may have to sue each other" and that the agreement "may not be changed, except in writing and signed by all parties." Along with a copy of the agreement, Ref-Chem submitted an affidavit from its human resources director. Among other things, the human resources director states that: (1) Ref-Chem kept Huckaba's signed arbitration agreement in her personnel file as a business record; and (2), pursuant to the agreement, Ref-Chem "voluntarily agreed to arbitrate any disputes between" itself and Huckaba.
In response, Huckaba also submitted an affidavit. She testifies in her affidavit that she signed the agreement "with the expectation and intent that it would be passed on for the signature of the appropriate Ref-Chem" officer. It was her "intention that in order to be bound by the agreement to arbitrate, Ref-Chem would also have to sign the agreement and agree in writing to be bound by its terms." She states that she did not discuss the terms of the agreement with anyone, nor did she orally agree to arbitration.
Based on the agreement, the district court granted Ref-Chem's motion to compel and dismissed the case without prejudice pending arbitration. The district court concluded that Huckaba's "continued employment after signing the Arbitration Agreement constitute[d] acceptance of that agreement by both" her and Ref-Chem. Huckaba timely appealed.
II.
"This court reviews de novo a district court's ruling on a motion to compel arbitration."
Klein v. Nabors Drilling USA L.P.
,
Determining whether there is a valid arbitration agreement is a question of state contract law and is for the court.
Kubala
,
III.
Under Texas law, a binding contract requires: "(1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) execution and delivery of the contract with intent that it be mutual and binding."
In re Capco Energy, Inc.
,
A court can decide intent as a matter of law.
Tricon Energy
,
The arbitration agreement at issue here contains: (1) a statement that "[b]y signing this agreement the parties are giving up any right they may have to sue each other;" (2) a clause prohibiting modifications unless they are "in writing and signed by all parties;" and (3) a signature block for the employer, Ref-Chem. This express language clearly indicates an intent for the parties to be bound to the arbitration agreement by signing. The agreement also identifies the parties in the first line as "[t]he organization referred to above ('Employer') and the Employee, whose signature is affixed hereto." This clause makes clear the parties' intention that Huckaba would sign the agreement. It does not negate the other references to all parties signing.
2
Ref-Chem is right when it notes that Texas courts have held that a signature block by itself is insufficient to establish the parties' intent to require signatures.
See, e.g.
,
Tricon Energy
,
*690
Firstlight Fed. Credit Union v. Loya
,
In several ways, this case is similar to a Texas appellate case,
In re Bunzl USA, Inc.
,
Ref-Chem distinguishes
Bunzl
by saying that the "agreement in
Bunzl
was missing one key provision that the court itself acknowledged: it did not have a provision informing the plaintiff that his continued employment constituted acceptance of the agreement." Ref-Chem argues that such language is present in this case and, consequently, that another case,
In re Halliburton Co.
,
Ref-Chem is wrong in two regards: (1) its focus on acceptance; and (2) its assertion that the agreement here, like the
Halliburton
agreement, informed Huckaba that her continued employment constituted acceptance. First,
Halliburton
addresses "whether an employee accepted the agreement," not the manner by which the agreement became binding.
See
Ref-Chem also points to other factors to demonstrate its intent to be bound without signing, such as the fact that it created the arbitration agreement, kept the agreement as a business record, and moved to compel arbitration when Huckaba sued.
3
Even if
*691
we were to consider this evidence, our conclusion would remain the same. Considering the record as a whole, this evidence does not satisfy Ref-Chem's burden that it intended to be bound without signing the agreement.
4
Indeed, if it were, then Ref-Chem could have it both ways-argue that it did not intend to be bound because it did not sign the agreement or it did because it kept the agreement and sought to compel arbitration.
5
We give meaning to the words Ref-Chem used in its agreement. And because Ref-Chem did not sign the agreement, neither party is bound.
See
Scaife v. Associated Air Ctr. Inc.
,
Because we conclude that there is not a valid agreement to arbitrate in this case, the district court's judgment compelling arbitration is REVERSED, and this case is REMANDED for further proceedings.
Though it is not clear that the district court actually applied an incorrect standard in deciding that the agreement to arbitrate is valid, we agree with Huckaba that the district court erred in stating that, at this stage, "[t]here is a 'strong presumption in favor of arbitration,' and the burden is on the party challenging the arbitration agreement to show it is invalid." (quoting
Carter v. Countrywide Credit Indus., Inc.
,
Moreover, because Ref-Chem's name is printed at the top of the agreement, the language appears to reflect the fact that the employer's name is already at the top of the agreement, regardless of which employee signs, but the name of the employee depends on which employee received and signed the agreement. Thus, it references the signature at the bottom of the page, to the right of which is the signature block for Ref-Chem.
In addition, Ref-Chem highlights Huckaba's continued employment as evidence of an intent to be bound without signing. Nonetheless, as discussed previously, the agreement did not state that Huckaba agreed to be bound as a condition of her employment. Thus, her continued employment does not conflict with her statement that she intended that the parties would be bound upon signing. For the same reason, the fact that Ref-Chem continued to employ Huckaba does not demonstrate its assent to the arbitration agreement.
See, e.g.
,
Bunzl
,
Notably, the same Texas court of appeals that decided
Bunzl
came to a different conclusion in
Firstlight
, holding that an arbitration agreement that had not been signed by the
employee
fell "squarely within the rule announced in
Halliburton
."
At oral argument, when asked what he would say if Ref-Chem did not want to arbitrate, Ref-Chem's attorney said that he does not think the agreement gives Ref-Chem a choice but, assuming Huckaba did want to arbitrate, "the arguments would just be switched." Oral Argument at 21:01-22:16,
Huckaba v. Ref-Chem, L.P.
, No. 17-50341 (5th Cir. argued Feb. 8, 2018). When asked if that then meant he would lose, the attorney clarified with a "yes."
Reference
- Full Case Name
- Kimberly HUCKABA, Plaintiff-Appellant, v. REF-CHEM, L.P., Defendant-Appellee.
- Cited By
- 74 cases
- Status
- Published