Ace Cash Express, Inc. v. Courtney Cox
05-15-01425-CV
| Tex. App. | Aug 9, 2016Background
- Courtney Cox, hired as an ACE Center Manager, signed an arbitration agreement dated Feb. 7, 2012 (effective Dec. 1, 2011) as part of new-hire paperwork.
- Cox sued ACE and her supervisor, James Medeiros, alleging sexual harassment and constructive discharge/retaliation (May 12, 2015).
- ACE moved to compel arbitration and attached an HR affidavit (Ginger Knight) with a copy of the arbitration agreement; Cox objected to authentication of the signature.
- Cox argued the agreement was unenforceable because (a) it was illusory (Policy 100 language in an older handbook reserved unilateral modification), (b) confidentiality requirement violated public policy, (c) the TAA (not FAA) governs so her personal-injury claims required attorney signature, and (d) claims against Medeiros were not covered.
- The trial court sustained Cox’s objection to the Knight affidavit and denied the motion to compel; ACE appealed. The court of appeals reversed as to ACE and ordered arbitration of Cox’s claims against ACE, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authentication of arbitration agreement | Knight did not show familiarity with Cox’s signature; affidavit insufficient under Tex. R. Evid. 901 | Knight, as HR custodian, authenticated records under business-records exception and Rule 901(b)(10) | Court: Knight’s affidavit authenticated the agreement; objection was not meritorious and ACE met its burden |
| Illusory promise (unilateral modification) | Agreement incorporated Policy 100 which reserved ACE’s right to modify policies at any time, making arbitration illusory | Policy 100 was not in effect during Cox’s employment and the standalone agreement itself required 30 days’ notice and prospective-only changes | Court: Agreement not illusory; Policy 100 was not incorporated and the modification clause was prospective only |
| Confidentiality / public policy | Confidentiality term violates Texas open-courts and public-trial principles | Arbitration confidentiality is permissible and favored; statutes protect arbitration confidentiality | Court: Confidentiality does not defeat enforceability; public‑court/public‑trial arguments inapposite to private arbitration |
| Governing law & attorney-signature for personal-injury claims | TAA governs; personal-injury claims require attorney signature under TAA, so agreement invalid | Agreement explicitly chooses FAA; FAA preempts TAA provisions that conflict (including attorney-signature requirement) | Court: FAA governs by contract; even if TAA applied, the attorney-signature requirement is preempted by FAA; agreement enforceable |
Key Cases Cited
- In re Labatt Food Serv., L.P., 279 S.W.3d 640 (Tex. 2009) (standard for reviewing arbitration orders and scope inquiries)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (party seeking to compel must establish valid arbitration agreement; burden shifts afterward)
- In re 24R, Inc., 324 S.W.3d 564 (Tex. 2010) (arbitration clause illusory only if promisor can avoid promise by amendment/termination)
- In re Rubiola, 334 S.W.3d 220 (Tex. 2011) (parties may choose FAA; FAA preemption principles)
- Fredericksburg Care Co., L.P. v. Perez, 461 S.W.3d 513 (Tex. 2015) (FAA applies to contracts affecting interstate commerce; FAA preempts conflicting TAA provisions)
- Budd v. Max Intern., LLC, 339 S.W.3d 915 (Tex. App.—Dallas 2011) (modification clauses are not illusory when changes are prospective only)
- Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (strong public policy favoring enforcement of arbitration agreements)