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THE SUPREME COURT OF
In re Dillard Department Stores, Inc., Relator
On Petition for Writ of Mandamus
In this original proceeding, relator Dillard Department Stores, Inc. seeks to compel arbitration of a retaliatory discharge claim filed by its former employee. The trial court denied Dillard’s motion to compel, and the court of appeals rejected Dillard’s petition for writ of mandamus. 153 S.W.3d 145. Because the trial court clearly abused its discretion in denying the motion to compel arbitration, we conditionally grant Dillard’s petition for writ of mandamus.
Garcia worked as a
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 (
record establishes that, on August 27, 2000, Dillard presented its arbitration
policy to employees at a mandatory meeting held inside the store before it
opened for business that day. Employees received a packet of materials
containing a summary, called the “Fairness in Action Program” (Program), a
detailed guide, called the “Rules of Arbitration” (Rules), and an
acknowledgment form, which constituted the cover page of the Rules. The
acknowledgment form briefly explained Dillard’s arbitration policy, stated an
effective date of August 1, 2000, and conspicuously warned that employees were
deemed to accept the policy by continuing their employment. In Halliburton,
we concluded that similar information unequivocally notified employees of
definite changes in their employment terms.
reviewing findings of fact in a mandamus proceeding, we cannot substitute our
judgment for that of the trial court.
The acknowledgment form provided a place for the employee’s signature acknowledging receipt of the Rules. Dillard collected the signatures and stored them in its personnel files, but was unable to produce Garcia’s form or a witness who remembers seeing Garcia at the meeting. Dillard contends, however, that Garcia’s affidavit and other evidence clearly establish that she received the acknowledgment form. Garcia’s affidavit states:
In the fall of 2000 I was
presented with a document by my employer that I was asked to sign. I was
presented the document during a
does not deny that the “fall of 2000" meeting was held on August 27, nor
that the “document” she read was the acknowledgment form. Indeed, Garcia cannot
do so because payroll records show that she clocked in on August 27 at 9:48
a.m., just twelve minutes before the meeting began. In addition, the store did not open for business until noon, and the meeting was held
in the women’s shoes department, where Garcia was a
The second factor relied upon by the court of appeals was Garcia’s statement that she refused to sign the document because she “did not agree to be bound by terms of the agreement.” From this, the court inferred that Garcia did not receive the acknowledgment form because it stated that the employee would be bound by continuing his or her employment, not by a signature. 153 S.W.3d at 150. The court assumed that Garcia correctly interpreted the legal effect of language contained in some other arbitration “document” she read in the fall of 2000. The evidence in the record, especially Garcia’s affidavit, compels a finding that Garcia received the same acknowledgment form everyone else received. Therefore, the trial court committed a clear abuse of discretion in finding no agreement to arbitrate.
In the trial court and in both mandamus briefs, Garcia argued that, even if she agreed to arbitrate, the agreement is illusory and unenforceable. The court of appeals did not expressly consider this issue, but we do so here, as it constitutes an alternative ground to support the trial court’s denial of Dillard’s motion to compel arbitration. See Tex. R. App. P. 47.1; 53.4.
enforceability of an arbitration agreement is a question of law. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (
As a starting point, Garcia concedes that nothing in the Rules expressly reserves to Dillard a right to unilaterally modify its arbitration policy. Garcia contends that Dillard nevertheless retained this right because the Rules state that the arbitration agreement does not modify the employee’s at-will relationship. Consequently, Garcia argues, the arbitration agreement, like her at-will employment, is terminable at any time, thereby rendering it illusory. This argument is without merit because an arbitration agreement is not illusory, despite being formed in an at-will employment relationship, if the promises to arbitrate do not depend on continued employment. In re Halliburton, 80 S.W.3d at 569. Dillard’s arbitration materials supply no basis for construing the agreement as contingent on continued employment. To the contrary, the Program and Rules clearly indicate that the primary purpose of the agreement is to resolve claims that arise in connection with the employee’s separation. Thus, Garcia’s at-will status, standing alone, does not render the arbitration agreement illusory.
Garcia contends that, despite the absence of an express reservation, Dillard
retained a right to unilaterally modify the arbitration agreement because it
exercised this power in 2002 by drafting a new arbitration policy. Garcia
envisions Dillard’s 2002 policy as retroactively amending her preexisting
agreement to arbitrate under the 2000 policy, yet nothing in the record
supports this view. An employer may adopt a new policy or amend an existing one
at any time, and the changes will not affect employees who do not receive
notice of the changes and accept them.
The trial court clearly abused its discretion in denying Dillard’s motion to compel arbitration. Accordingly, without hearing oral argument, we conditionally grant the writ of mandamus and order the trial court to vacate its order denying Dillard’s motion to compel arbitration, and to enter a new order compelling arbitration of Garcia’s claims. Tex. R. App. P. 52.8(c). We are confident the trial court will comply, and our writ will issue only if it does not.
Opinion Delivered: March 3, 2006