Opinion
No. 04-06-00012-CV
Delivered and Filed: March 15, 2006.
This proceeding arises out of Cause No. 2005-CI-05032, styled Valentin O. Martinez v. RRGT, Inc. d/b/a Redondo Manufacturing and Dean Fritz, pending in the 166th Judicial District Court, Bexar County, Texas, the Honorable Richard E. Price presiding.
Petition for Writ of Mandamus Conditionally Granted in Part.
Sitting: Catherine STONE, Justice, Sandee Bryan MARION, Justice, Phyllis J. SPEEDLIN, Justice.
MEMORANDUM OPINION
RRGT, Inc. d/b/a Redondo Manufacturing seeks mandamus relief from the trial court's order denying its motion to compel arbitration. We conditionally grant the writ but only as to the claims between Valentin O. Martinez and RRGT, Inc. d/b/a Redondo Manufacturing.
Background
On April 1, 2003, RRGT became a non-subscriber under the Texas Workers' Compensation System and adopted an Occupational Injury Benefits Plan for its employees. The Plan provided benefits for employees who sustain certain on-the-job injuries. The Plan contained an arbitration provision.
When the Plan was adopted, Yvonne N. Richardson, RRGT's human resource manager, conducted training sessions with all RRGT employees regarding the Plan's contents. Richardson distributed copies of a Summary Plan Description to all RRGT employees, including Martinez. The Plan Description summarized the arbitration provision and stated, "By continuing to work for the Company, you acknowledge and expressly agree that any claim or dispute arising out of any Accident or Occurrence, or otherwise regarding or relating to the Plan, will be resolved exclusively through alternative dispute resolution procedures, including final and binding arbitration." Martinez participated in the training session and questioned Richardson regarding both the required use of Plan-approved physicians and the arbitration provision. Martinez refused to sign an acknowledgment of the Plan; however, he continued to work for RRGT.
On May 3, 2004, Martinez was injured during an incident with another employee, Dean Fritz.
It is disputed whether Martinez or Fritz instigated the dispute. Martinez went to his own physician for treatment. Within a week of the accident, Richardson spoke with Martinez about the need to use a Plan-approved physician to receive benefits under the Plan and the required use of arbitration to resolve any dispute with RRGT. Martinez also received a letter from the Plan's insurance carrier regarding the need to use a Plan-approved physician to receive benefits under the Plan. Martinez eventually went to a Plan-approved physician and approximately $20,096.50 in medical bills were paid on his behalf.
Martinez filed a lawsuit against RRGT and Fritz. According to the allegations in Martinez's petition, Fritz, a production manager, "became upset over the production process being implemented by" Martinez. Fritz "disciplined [Martinez] by vulgar words, throwing a hard hat at him and the considerable physical force by physically pushing [Martinez] and causing him to fall and strike a concrete slab with his body." Martinez alleged that Fritz was acting within the course and scope of his employment. Martinez asserted that RRGT was negligent by: (1) failing to provide a safe work place; (2) negligently failing to supervise Fritz's work activity of utilizing excessive physical means in supervising and disciplining Martinez; (3) negligently retaining Fritz as an employee; (4) allowing Martinez to work in an unreasonably dangerous environment; and (5) failing to promulgate, implement, enforce and/or ensure compliance with adequate safety procedures, policies, and practices. Martinez further alleged RRGT and Fritz were grossly negligent. Martinez also asserted claims for assault and intentional infliction of severe emotional distress.
RRGT moved to compel arbitration. Fritz responded that no agreement required him to arbitrate the claims asserted by Martinez against him individually; however, he did not challenge RRGT's contention that Martinez's alleged cause of action against RRGT was arbitrable. Martinez did not file a written response. No reporter's record was made of the hearing on the motion. The trial court entered an order denying the motion to compel.
In its mandamus petition, RRGT contends that Martinez's claims are within the scope of the arbitration provision or, alternatively, that Martinez's acceptance of medical benefits under the Plan resulted in a ratification of the Plan's terms, estopped Martinez from denying the efficacy of the arbitration provision, or resulted in a waiver to any objection to arbitration. Martinez filed a response asserting: (1) RRGT failed to establish a valid arbitration agreement because Martinez did not sign the acknowledgment; or (2) the arbitration agreement was unconscionable. Fritz also filed a response asserting: (1) he was not a party to the arbitration agreement between RRGT and Martinez; (2) Fritz is not required to arbitrate under an equitable estoppel theory; and (3) the tort claim against Fritz individually is not within the scope of the arbitration agreement.
Arbitration Agreement
A writ of mandamus will issue when a trial court erroneously denies a motion to compel arbitration under the Federal Arbitration Act. In re Alamo Lumber Co., 23 S.W.3d 577, 579 (Tex.App.-San Antonio 2000, orig. proceeding [mand. denied]). Whether an enforceable arbitration agreement exists is a legal question subject to de novo review. In re Kellogg Brown Root, 80 S.W.3d 611, 615 (Tex.App.-Houston [1st Dist.] 2002, orig. proceeding).
The parties do not dispute that the Federal Arbitration Act is applicable.
The FAA does not require an arbitration agreement to be signed if it is in writing and agreed to by the parties. In re AdvancePCS Health L.P., 172 S.W.3d 603, 606 (Tex. 2005). An employer may enforce an arbitration agreement entered into during an at-will employment relationship if the employer establishes that the employee received notice of its arbitration policy and accepted it. In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002). Notice is effective if it unequivocally communicates to the employee definite changes in the employment terms. Id. If the employee receives notice and continues working with knowledge of the modified terms, the employee accepts the modified terms as a matter of law. Id.
The evidence conclusively established that RRGT adopted the Plan including the arbitration provision and notified its employees, including Martinez. Martinez contends that he did not accept the modified terms because he refused to sign the acknowledgment. Martinez does not dispute that he received notice of the arbitration policy and that he continued working after the Plan was adopted. Accordingly, Martinez accepted the arbitration provision as a matter of law. See id.
Martinez also contends that his acceptance of the Plan could not have been a condition of employment because RRGT failed to reprimand him for failing to sign the acknowledgment or for initially going to his own doctor. Martinez also argues that because he is an at-will employee, the arbitration provision was not supported by consideration, citing Light v. Centel Cellular Co., 883 S.W.2d 642 (Tex. 1994). The Texas Supreme Court rejected Martinez's complaint regarding lack of consideration in Halliburton, 80 S.W.3d at 569-70, by citing the holding in In re Jebbia, 26 S.W.3d 753, 758 (Tex.App.-Houston [14th Dist.] 2000, orig. proceeding), which rejected the argument that an arbitration provision lacks consideration because the employment relationship was at-will. In addition, RRGT was not required to reprimand Martinez for failing to sign the acknowledgment. His continued employment constituted acceptance as a matter of law so RRGT would have no reason to reprimand him. Similarly, RRGT would have no reason to reprimand Martinez for going to his own doctor for treatment. Martinez was free to visit his own doctor for treatment; however, Martinez would have to personally pay for that treatment. Martinez was required to seek treatment from a Plan-approved physician only if he wanted to receive benefits under the Plan.
Unconscionability
Martinez contends that the arbitration provision was unconscionable because he was not given the option of seeing his own doctor. "Because an employer has a general right under Texas law to discharge an at-will employee, it cannot be unconscionable, without more, merely to premise continued employment on acceptance of new or additional employment terms." Halliburton, 80 S.W.3d at 572. The Plan did not deprive Martinez of his right to seek treatment from his own doctor. Instead, the Plan required Martinez to see a Plan-approved physician as a condition to receiving any benefits under the Plan. Martinez could have elected to continue treatment with his own physician if he was willing to forego the Plan benefits. Martinez has failed to demonstrate how the requirement that Martinez see a Plan-approved physician as a condition to receiving benefits under the Plan is unconscionable.
Claims Against Fritz
No arbitration agreement exists between Martinez and Fritz in regard to the claims Martinez asserts against Fritz in his individual capacity. RRGT has not alleged that the claims against Fritz in his individual capacity should be arbitrated under some exception recognized under general equitable or contract law. In re Merrill Lynch Trust Co. FSB, 123 S.W.3d 549, 554-55 (Tex.App.-San Antonio 2003, orig. proceeding [mand. filed]); see also Horanburg v. Felter, 99 P.3d 685, 689-90 (N.M.Ct.App. 2004) (holding arbitration agreement between employer and employee did not require arbitration of employee's intentional tort claims against another employee even though the claims against the employer were based in part on the actions by the other employee). Accordingly, the trial court did not abuse its discretion in refusing to compel arbitration of the claims by Martinez against Fritz in his individual capacity.
Conclusion
The trial court abused its discretion in denying RRGT's motion to compel with regard to Martinez's claims against RRGT. The Honorable Richard E. Price is ordered to vacate the order denying RRGT's motion to compel and enter an order compelling arbitration of the claims asserted by Martinez against RRGT within fifteen days from the date of this court's opinion and order. If we are notified Judge Price has not vacated and entered the orders as directed within fifteen days from the date of this opinion and order, the writ of mandamus will issue.