Ophthalmic Consultants of Texas, P.A. v. Adolfo Morales
13-15-00278-CV
| Tex. App. | Oct 15, 2015Background
- OCT hired Dr. Adolfo Morales in 2009; Morales signed a three‑page standalone "Agreement to Arbitrate" requiring employment disputes (including statutory wrongful discharge and discrimination claims) to be arbitrated before the AAA under EDR Rules.
- The agreement states arbitration substitutes for litigation and contains provisions on location, rules, and fee allocation (OCT pays all costs except Morales may owe up to $100 in administrative fees, waivable for hardship).
- Morales’ employment ended when OCT declined to renew his contract; he exhausted administrative remedies at the Texas Workforce Commission and sued in district court alleging age discrimination.
- OCT answered, demanded arbitration, and filed a motion to compel arbitration; the trial court denied the motion and OCT appealed interlocutorily under Tex. Civ. Prac. & Rem. Code § 51.016.
- The court of appeals reviewed de novo whether a valid arbitration agreement existed, whether the claims fell within its scope, and whether OCT waived arbitration rights.
Issues
| Issue | Plaintiff's Argument (Morales) | Defendant's Argument (OCT) | Held |
|---|---|---|---|
| Whether arbitration agreement is illusory (lack of mutuality/consideration) | Agreement is illusory because OCT could modify or cancel the arbitration program at will | No contract language allows OCT to unilaterally modify; parties made reciprocal binding promises | Agreement is not illusory; valid mutual promises establish consideration |
| Whether agreement is too indefinite to form a contract | Agreement omits essential terms and is indefinite | Agreement identifies essential arbitration terms (AAA, EDR Rules, procedure, record, payment) | Agreement is sufficiently definite; valid contract formed |
| Whether agreement is substantively unconscionable | Provision is one‑sided: requires Morales to pay his own attorney’s fees and is silent on future modifications | The ‘‘American Rule’’ normally requires each party to bear its own fees in court or arbitration; no unconscionability shown | Not unconscionable under circumstances; enforceable |
| Whether OCT waived right to arbitrate | Delay between administrative filing and OCT’s motion implies waiver | OCT only filed an answer (with arbitration demand) and then the motion; it did not substantially invoke the judicial process | No waiver; OCT preserved right to compel arbitration |
Key Cases Cited
- In re Kellogg Brown & Root, 166 S.W.3d 732 (Tex. 2005) (party seeking to compel arbitration must prove existence of a valid arbitration agreement and that claims fall within its scope)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (apply traditional contract principles to arbitration agreements; mutuality/consideration analysis)
- Buckeye Check Cashing Inc. v. Cardegna, 546 U.S. 440 (2006) (court decides validity of arbitration agreement when challenge is to the arbitration clause itself)
- In re Bruce Terminix Co., 988 S.W.2d 702 (Tex. 1998) (strong presumption against waiver of arbitration rights)
- Jernigan v. Langley, 111 S.W.3d 153 (Tex. 2003) (waiver is intentional relinquishment of a known right; requires substantial invocation of judicial process plus prejudice)
- Tony Gully Motors I. L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (the American Rule: parties generally bear their own attorney’s fees absent statute or contract)