Motions to compel arbitration almost always succeed. One that did not was addressed in Parrott v. International Bank of Commerce, 778 F.Supp.3d 888 (W.D. Tex. 2025). In Parrott, the plaintiffs filed a class action regarding the employees’ profit-sharing plan. The proposed class sought to attack the investment strategy of IBC. Mr. Parrott left his job at IBC before the employer added the arbitration provision to the profit-sharing Plan. The Defendant then argued that the arbitration provision related back to the profit-sharing plan as it existed when Mr. Parrott was employed. That is, the employer argued that even if the arbitration provision came after Mr. Parrott had departed, the provision would relate back to the time when Parrott was still employed.

But, the U.S. District Court did not agree. The harm to the plaintiff occurred before he left his job, not after. That means the harm occurred before the arbitration provision was added. The profit-sharing Plan specifically defines a Plan participant as one who is employed by IBC. As a former employee, Parrott had already received his distribution under the Plan. That means no consideration passed to Mr. Parrott for his supposedly agreeing to the new arbitration provision. No consideration means the arbitration provision did not constitute a binding agreement.

So, the Court denied the Defendant’s motion to compel arbitration. See the decision here.