Waiver of Arbitration

Arbitration agreements are documents that employees are forced to sign when they start work (usually they don’t even get a good chance to read them) that require employees to waive a jury trial and go to a judge who is paid by the employer. They are very common in Texas and the Texas Supreme Court tries to uphold these agreements whenever possible. However, the employer can waive its right to enforce them in some circumstances.

In the case of Truly Nolen of America, Inc. v. Martinez, (Tex. App.—El Paso February 26, 2020)—An El Paso, Texas employer waived its right to enforce an arbitration agreement with respect to an employee’s wrongful discharge lawsuit by failing to move to compel arbitration until more than a year and a half after the employee filed suit, and only a month before trial was scheduled to begin. The Court seemed to rely heavily on the trial being only a month away. This case is contrasted by the case of Services Inc. v. McDonald, (Texas 2020) where the employee’s lawyer sent a letter to the employer asking if they wanted to arbitrate under their agreement and if they did not respond within 30 days that they would file a lawsuit with the assumption that the employer desired to waive their arbitration agreement. While the Court did not find waiver, the court did not dismiss that such letters could cause waiver. However in this case the employee’s lawyer could not prove that he sent the letter to the person at the company who made these decisions. It is difficult to know if they would have found waiver if the letter had been delivered to the general counsel of the corporation or to the president; but it seems that if a letter such as that is going to be presented it should be sent to the president the general counsel (if there is one) and the head of Human Resources of the company. As I have stated previously, the Texas Supreme Court does everything they can to enforce arbitration agreements so I suspect that even if you could prove you sent the letter to the decision maker they would find some way to help out the employer and hurt the employee and find that the arbitration is not waived. In New Mexico the courts are much more likely to find waiver and this technic would probably be much more effective than in Texas.

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