Texas Supreme Court Compels Arbitration of Employment Discrimination Claims

The Supreme Court of Texas held that an agreement to arbitrate discrimination claims between an employee and a staffing agency hired by the employer survives the dissolution of the contract between the staffing agency and employer.

In the present case, In re Polymerica, __S.W.3d __ (Tex. 2009) (No. 08-1064), Polymerica, L.L.C. d.b.a Global Enterprises, Inc. (“Global”), a manufacture of plastics, hired Angelica Soltero in 1998. In 2002, Global contracted with dmDickason Staff Leasing Company (“Dickason”) to manage the company’s human resources department.

Shortly thereafter, Soltero signed a Dispute Resolution Plan, which “appl[ies] to any disputes between dmDickason/Global Enterprises and any applicant for employment, employee or former employee, including legal claims such as discrimination, wrongful discharge or harassment.” The Plan calls for binding arbitrationunder the Federal Arbitration Act.

On December 31, 2005, Global ended its contract with Dickason and resumed the management of its human resources department. Global terminated Soltero five days later. Then, Soltero sued Global claiming wrongful termination based on her national origin as well as retaliation for reporting alleged sexual harassment.

The trial court denied Global’s motion to compel arbitration concluding that all of Soltero’s claims arose from the wrongful termination after the agreement between Global and Dickason had ended. Global appealed.

The Texas Supreme Court, distinguishing In re Neutral Posture, Inc., 135 S.W.3d 725, 730 (Tex. App.—Houston [1st Dist.] 2003, no pet.), stated that “[t]here is no such time limitation in the Dispute Resolution Plan, nor there is a condition that the Global and Dickason relationship must be in place for either to enforce the Plan.” The court concluded that Soltero’s promise to arbitrate includes her claims against Global and directed the trial court to compel arbitration.

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