White v. Softlayer Technologies Inc, 3:15-cv-00527

White, SoftLayer’s Assistant General Counsel (2010–2012), sues SoftLayer entities including IBM for Title VII race discrimination and retaliation and 1981 claims.
IBM Defendants move to compel arbitration under an Employment Agreement dated February 15, 2010, requiring binding FAA arbitration of employment disputes.
Paragraph 9 of the Employment Agreement provides broad arbitration over disputes related to employment, with limited statutory exceptions; it also states waiver of jury trial and requires a mutually agreed arbitrator with written award.
White disputes existence/validity of the arbitration agreement, claims it is illusory, and argues unconscionability; he acknowledges signature on the Employment Agreement.
Court applies Texas law to contract interpretation, determines there is a valid arbitration agreement by a preponderance of the evidence, and orders arbitration with dismissal of White’s claims with prejudice.
Court concludes all asserted claims fall within the arbitration clause and dismisses the case rather than staying

Issue	Plaintiff's Argument	Defendant's Argument	Held
Existence of a valid arbitration agreement	White lacks memory of signing arbitration agreement	Employment Agreement bearing White’s signature binds him	Valid arbitration agreement exists; binding on White
Illusory nature of Paragraph 9	Agreement could be unilaterally avoided by future amendments	Paragraph 12 prevents unilateral modification; Paragraph 1 is at-will employment only	Not illusory; modification restrictions render it binding
Conscionability of Paragraph 9	Arbitration is procedurally/substantively unconscionable due to costs and lack of protections	Silence on costs does not render unconscionable; disparity in sophistication is insufficient	Not substantively or procedurally unconscionable
Scope of arbitration and dismissal with prejudice	Claims may fall outside or not fully covered by arbitration	All claims related to employment fall within Paragraph 9’s scope	All claims are arbitrable; dismissal with prejudice appropriate

Will-Drill Resources, Inc. v. Samson Resources Co., 352 F.3d 211 (5th Cir. 2003) (two-step FAA arbitration inquiry; existence and scope)
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (FAA supersedes judicial discretion; compel arbitration)
Wash. Mutual Fin. Group, LLC v. Bailey, 364 F.3d 260 (5th Cir. 2004) (state-law contract interpretation governs arbitration agreements)
In re Palm Harbor Homes, Inc., 195 S.W.3d 672 (Tex. 2006) (arbitration clause not illusory; multiple contracts can coexist)
In re McKinney, 167 S.W.3d 833 (Tex. 2005) (signed arbitration clause binding absent fraud)
In re December Nine Co., 225 S.W.3d 693 (Tex. App.—El Paso 2006) (no fraud in contract formation; arbitration enforceable)
In re FirstMerit Bank, N.A., 52 S.W.3d 749 (Tex. 2001) (arbitration agreements and unconscionability framework)
Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069 (5th Cir. 2002) (procedural unconscionability and bargaining power considerations)
Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161 (5th Cir. 1992) (dismissal where all issues are subject to arbitration)
Adam Techs. Int’l S.A. de C.V. v. Sutherland Global Servs., Inc., 729 F.3d 443 (5th Cir. 2013) (arbitration agreements and scope considerations in international contexts)
Rojas v. TK Communications, Inc., 87 F.3d 745 (5th Cir. 1996) (recognizes arbitration of Title VII claims is common)