Mandatory arbitration agreements have become very common in a wide variety of jobs. Typically, the newly hired employee signs a raft of documents, one of which may include an arbitration agreement. Often, the employee has no recollection that s/he signed an arbitration agreement. One plaintiff attorney, recognizing that the employee may not know whether he signed an arbitration agreement, sent a pre-suit letter to the former employer asking if the employee signed a mandatory arbitration agreement. The lawyer’s letter provided that if the employer did not respond within one month with a signed arbitration agreement, then the plaintiff would file suit in state court. The plaintiff would presume that if there was a mandatory agreement, then failing to provide it would constitute assent to a lawsuit field in state court.
The employer did not respond. Neither did it provide a signed mandatory arbitration agreement. Yet, it moved to compel arbitration. So, was the plaintiff lawyer’s letter a new agreement which essentially overrode the mandatory arbitration agreement? Yes, said the Fourth Court of Appeals in San Antonio. In Adcock v. Five Star Rentals, No. 04-17-00531 (San Antonio App. 4/18/2018), found that the pre-suit letter amounted to an agreement to proceed in state court with this employment related lawsuit. The court noted that the lawsuit commenced, and written discovery was propounded. It was not until the employer noticed the mandatory arbitration agreement when producing documents that it invoked arbitration. The lawsuit was six months old at that point. But, the court did not rest on the possibility that the employer may have invoked arbitration too late. It found the parties entered into a new agreement when Five Star did not provide a copy of the mandatory arbitration agreement.
See the decision here.