Texas: No Arbitration Where Employer Could Not Show Employee Had Notice of Arbitration Agreement

Notice of the Texas non-subscribing employer’s occupational injury benefit plan was insufficient by itself to show that an employee had notice of an arbitration agreement referred to therein since the arbitration agreement was a separate document, not signed by the employee, and of which the employee had no notice, held a Texas appellate court recently in Big Bass Towing Co. v. Akin, 2013 Tex. App. LEXIS 10190 (Aug. 14, 2013).  

Akin, a tow truck driver employed by Big Bass, suffered severe injuries when a wrecked vehicle he was repairing rolled over and crushed him. Big Bass was a non-subscriber to the Texas Workers’ Compensation Act, but it did have an “Occupational Injury Employee Benefit Plan” that provided payment for “medical care, salary continuance, and certain death and dismemberment benefits arising from accidental injuries within the course and scope of employment.” It was uncontested that Akin received notice of this plan and accepted benefits under it.

Akin filed suit against Big Bass, alleging that it was negligent in failing to provide him with a reasonably safe place to work and vicariously liable for the negligence of a co-employee. Big Bass responded by both raising the affirmative defense of arbitration in its answer and filing a motion to compel arbitration and stay litigation proceedings. It cited an arbitration agreement and argued that Akin had acknowledged and agreed to the existence of a binding arbitration policy to resolve all workplace injury and negligence disputes. Akin moved for partial summary judgment on Big Bass’s arbitration defense claim, arguing in relevant part that he had no notice or knowledge of any agreement to arbitrate. After a hearing, the trial court denied Big Bass’s motion to compel arbitration, and the instant interlocutory appeal followed.

The appellate court held that an affidavit signed by a Big Bass official that claimed the contents of the “Occupational Injury Benefit Plan and Mutual Agreement to Arbitrate” were discussed during a meeting was not determinative; the official did not state that she attended the 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—perhaps most importantly—whether Akin was at the meeting. The employer’s contention that Akin had notice of the arbitration agreement because the “Occupational Injury Employee Benefit Plan and Mutual Agreement to Arbitrate” was available for Akin to take home as part of his personal records was also irrelevant. That a document was “available” for inspection did not demonstrate that Akin had notice of the document. Nor did Akin’s acceptance of benefits from the plan constitute a ratification of the arbitration agreement. The trial court did not, therefore, abuse its discretion by denying the employer’s motion to compel arbitration.