OPINION
FirstLight Federal Credit Union moved to compel arbitration of discrimination and retaliatory discharge claims filed by its former employee, Martha Loya. Loya argued that no agreement to arbitrate' existed between the parties because she had not signed the agreement, and that in any event, her claims did not fall within the scope of the arbitration agreement, and the agreement was illusory. The trial court denied FirstLight’s motion' to compel. ’
The key issues on appeal concern: (1) the effect of a delegation clause contained in the arbitration agreement, which gives the arbitrator the power to determine the gateway issues of the validity and enforceability of the agreement; and (2) whether Loya was bound by the arbitration agreement, despite her failure to sign the agreement, because she continued her employment after receiving notice of the arbitration agreement. We agree with FirstLight that the delegation clause required Loya to arbitrate one of her challenges to the agreement — whether it was illusory. Despite the delegation clause, however, Loya’s assertion that her claims did not fall within the scope of the agreement, and Loya’s challenge to the very existence of an agreement to arbitrate, were issues for the trial court to decide.
Ultimately, we conclude, the trial court abused its discretion in refusing to compel arbitration. Loya, as an at-will employee, was bound by the agreement as a matter of law despite her lack of signature, because she continued working after receiving notice of the arbitration agreement. Further, Loya’s claims clearly fell within the scope, of the agreement. Accordingly, we reverse and remand for entry of an order compelling arbitration of Loya’s claims.
DISCUSSION
Standard of Review
We review a trial court’s decision to grant or deny a motion to compel arbitration under an abuse of discretion standard. Wright v. Hernandez,
Background
Loya was an at-will employee. She began worldng at FirstLight in 2004 as a
FirstLight filed a motion to compel arbitration, contending that a 2011 arbitration agreement governed the parties’ dispute. The trial court held three hearings on FirstLight’s motion to compel, receiving evidence, testimony, and legal arguments concerning the validity and enforceability of the arbitration agreement, including FirstLight’s contention that a delegation clause in the arbitration agreement required that the arbitrator, not the court, resolve the gateway issues of validity and enforceability.
According to the evidence, in December 2005, FirstLight sent notice to its employees that effective February 1, 2006, it was adopting a “Dispute Resolution Policy” requiring that all legal disputes arising from employment, including claims for wrongful termination, would be subject to mandatory arbitration. The notice informed the employees that' their decision to continue employment with FirstLight after February 1, 2006, would constitute their agreement to be bound by the Policy. Loya signed a “Receipt Acknowledgment” on December 20, 2005, acknowledging that she had received a copy of the notice and the .2006 Dispute Resolution Policy. This 2006 Dispute Resolution Policy remained in effect until it was revised in 2011.
The 2011 revised arbitration agreement was. entitled “Dispute Resolution Policy & Procedure.” This 2011 Dispute Resolution Policy & Procedure was the arbitration agreement in effect at the time FirstLight terminated Loya in 2013. The 2011 agreement provided that it was governed by the Federal Arbitration Act,
The agreement stated that FirstLight agreed to be bound to its mandatory arbitration terms, and that “[a]ny employee accepting or continuing employment, also agrees to be bound by the Policy as a condition of his or her employment.” Immediately thereafter, the agreement stated: “An employee must sign an acknowl-edgement of receipt of this policy and
The final page of the 2011 agreement was entitled “Dispute Resolution Mutual Agreement” and stated: ‘Tour decision to accept employment or to continue employment with FirstLight FCU constitutes agreement on your part to be bound by this Policyf.]” The final page contained a signature block for FirstLight, which was signed by its President and CEO. It also contained a signature block for the employee, which was preceded by the statement: “I have received a copy of the Dispute Resolution Policy & Procedures [sic] and agree to abide by the terms contained within.”
It is undisputed that Loya did not physically sign her name in this signature block. There was evidence, however, that Loya had received notice of the 2011 agreement by electronic means and had acknowledged its receipt electronically. FirstLight’s employees were able to securely access employment and benefits information through a secure web-portal, using a unique employee log-in and an employee-generated password.
Analysis
Loya contended in the trial court that the arbitration agreement was unenforceable because she had not signed the arbitration agreement and could not be bound to arbitrate by her conduct. Loya also argued that, in any event, the agreement was illusory and her claims did not fall within the scope of the agreement. In its first two points on appeal, FirstLight argues that all of these issues should have gone to the arbitrator because the 2011 agreement contained a delegation clause requiring the arbitration of “disputes regarding the validity or enforceability” of the agreement. We agree in part.
The Effect of the Delegation Clause
Ordinarily, the trial court retains the power to rule on gateway issues such as the validity and enforceability of an arbitration agreement. See Nazareth Hall Nursing Ctr. v. Melendez,
It is well-settled, however, that parties can agree- to delegate to the arbitrator the power to resolve gateway issues regarding the validity and enforceability of the arbitration agreement; in that event, the ‘entire matter of arbitrability is transferred from the trial court to the arbitrator. Iturralde,
In Iturralde, we held that a delegation clause' providing that the parties agreed to arbitrate “any and all claims challenging the validity or enforceability of this Agreement [in whole or in part]” clearly and unmistakably provided for issues of validity and enforceability to be determined by the arbitrator. Iturralde, ,
The Arbitrator Determines Whether the Agreement is Illusory
Loya contends the arbitration agreement is unenforceable because the modification provision contained in the arbitration agreement renders the agreement illusory. In Iturralde, we concluded that the determination whether the arbitration agreement was illusory was a matter of “validity and enforceability” that had been delegated to the arbitrator. Id. We recognized that, under the United States Supreme Court’s decision in Rent-A-Center, our analysis depended on the kind of challenge being made. Id. If the challenge related to the arbitration agreement as a whole, and the agreement contained a provision delegating issues of arbitrability to the arbitrator, then the challenge must be directed to arbitration. Id. Only if the challenge was specific to the issue of delegation, would the issue be properly decided by the trial court. Id.
As in Iturralde, the arbitration agreement here clearly and unmistakably provides that issues of validity and enforceability go to the arbitrator. And, like the -plaintiff in Iturralde, Loya challenges the entire arbitration agreement based on the
The Trial Court Determines the Scope of the Agreement
Whether Loya’s claims fall within the scope of the agreement is a different matter. While parties may agree to delegate issues concerning the scope of an arbitration agreement to the arbitrator, the scope-of an arbitration agreement is a separate issue from its validity and enforceability. A “party seeking to compel arbitration must establish both (1) the existence of a valid enforceable agreement to arbitrate and (2) that the claims at issue fall within the scope of that agreement.” G.T. Leach Builders, LLC v. Sapphire V.P., LP,
The delegation clause here does not state that issues concerning the scope of the agreement go to the arbitrator. Rather, it limits the delegation of gateway issues to “disputes regarding the validity or enforceability of the. Policy.” In Iturralde, the delegation clause specified that arbitration included claims challenging not only “the validity or enforceability of this Agreement” but also claims challenging “the. applicability of this Agreement to a particular dispute or claim.”
We conclude therefore that the 2011 arbitration agreement does not clearly and unmistakably delegate the issue of the scope of the agreement to the arbitrator. Thus, whether Loya’s claims fell within the scope of the 2011 arbitration agreement was an issue for the trial court.
The Trial Court Determines Whether an Agreement to Arbitrate Exists
Similarly, we conclude Loya’s challenge- to the very existence of an agreement to arbitrate — as opposed to its
As ah initial matter, we note it is unclear whether a challenge to the very existence of an agreement to arbitrate can ever be delegated to an arbitrator, or whether that challenge must always be decided by the court, even if the arbitration agreement provides that issues of validity, enforceability, or contract formation must go to- an arbitrator. We have previously stated, albeit in a case not involving a delegation clause, that “when the very existence of an arbitration agreement is challenged as opposed to its continued validity or enforcement, it is a matter for the court” because that contention “is an argument directed at the actual making of the contract[.]” Nazareth Hall Nursing Ctr.,
Some courts have explicitly determined that the parties must first agree to arbitrate arbitrability, before any gateway issues can be considered by the arbitrator. Accordingly, unless an agreement to arbitrate first comes into existence, the parties have not agreed to submit any issues to the arbitrator, much less contract formation issues. See, e.g., Denar Restaurants, LLC v. King, No. 02-13-00142-CV,
Several cases not involving delegation clauses, however, indicate that even issues as to contract formation can be delegated to the arbitrator. See, e.g., Granite Rock Co. v. Int’l Bhd. of Teamsters,
We need not decide this difficult issue in the present case, however, because the delegation clause in the 2011 agreement delegated only issues of “validity or enforceability.” We agree with Justice Willett about “the murky line between contract formation and contract validity.” In re Morgan Stanley & Co.,
We thus proceed to determine whether Loya was bound to arbitrate under the terms of the 2011 arbitration agreement, and .if so, whether her claims fell within the scope of that agreement.
Agreement through Conduct
We must ■ determine then whether Loya was required to arbitrate her claims when she never signed the signature block on the last page of the 2011 arbitration agreement. Loya correctly points out that typically, a party manifests its assent by signing'an agreement. Rachal v. Reitz,
• Moreover, the Texas Supreme Court has repeatedly held that “neither the FAA nor Texas law requires that arbitration clauses be signed, so long as they are written and agreed to by the parties.” In re Polymerica, LLC,
This Court has similarly noted that the Federal Arbitration Act does- not require that the agreement be signed by the parties. Wright,
In the absence of a signature on a contract, a court may look to other evidence to establish the parties’ assent to the terms of the contract. In re Bunzl USA, Inc., 155 S.W.3d at, 209; see also Lujan v. Alorica,
In the present case, it is un-controverted that Loya was notified electronically ' of the 2011. arbitration agreement and that she electronically acknowledged receipt of that notice and the arbitration agreement itself. The 2011 arbitration agreement specifically notified Loya that “[a]ny employee accepting or continuing employment, also agrees to be bound by the Policy as a condition of his or her employment,” and that “[yjour decision to accept employment or to continue employment with FirstLight FCU constitutes agreement on your part to be bound by this Policy[.]” It is also undisputed that Loya continued working after receipt of this notice. This case thus falls. squarely within the rule announced in In re Halliburton Co.,
Loya argues that the Halliburton rule does not apply because in Halliburton the employer unequivocally notified the employee that continued employment would constitute acceptance of the arbitration
Loya claims that similar contradictions exist here, and thus FirstLight’s notice was equivocal and her continued employment was not acceptance of the arbitration agreement. See Hathaway,
We think a crucial distinction exists here that makes Hathaway, Burnt, and Scaife inapplicable. Here, the arbitration agreement explicitly notified Loya that continued employment would -constitute acceptance. In order for Loya to prevail, we would necessarily be forced to read that provision out of the agreement and render it meaningless. We have repeatedly held that arbitration agreements are “creatures of contract,” and that we must apply “standard contract principles to determine whether a valid arbitration agreement exists.” Wright,
The agreement clearly provides that Loya, through her continued employment, agreed to be bound by the arbitration agreement as a condition of her employ
Further, to make a signature a condition precedent to enforcement of a contract — including an arbitration agreement — the agreement must clearly and explicitly require a signature before it becomes binding. See Wright,
Loya’s Claims Fall Within the Scope of the Agreement
Having concluded that a valid, enforceable arbitration exists, a strong presumption favoring arbitration arises. J.M. Davidson, Inc. v. Webster,
Loya sued FirstLight complaining her termination was wrongful and asserting claims for discrimination and retaliation under the Texas Commission on Human Rights Act. See Tex. Lab. Code Ann. § 21.051 (West 2015). The scope of the 2011 arbitration agreement was broad. It required arbitration of “all disputes relating to or arising out of an employee’s employment ,.. including claims regarding termination of employment[,]” unless explicitly excluded from coverage. The agreement noted that examples of the type of disputes or claims covered by this policy included “claims for wrongful termination of employment” including “employment discrimination ... or retaliation under the ... the Texas Labor Code[.]” It is apparent that all of Loya’s claims fell within the scope of the arbitration agreement, unless they were explicitly excluded.
Loya does not discuss the scope issue on appeal, but in the trial court, she asserted that her claims were excluded from coverage by the following exclusion, because she had first filed a charge with the EEOC:
Charges before the Equal Employment Opportunity Commission ... are not subject to exclusive review by arbitration. This means that an employee may file such claims with the appropriate agency that has jurisdiction over them if they wish, regardless of whether they decide to use arbitration to resolve them. Employees must first exhaust any administrative procedures provided by any statute which employee claims the FirstLight FCU has violated. However, once the administrative agency completes its processing of the action against the FirstLight FCU, employees must use arbitration if they wish to pursue further legal rights, rather than filing a lawsuit on the action.
As is apparent, Loya’s claims were not within the scope of arbitration when they were pending before the EEOC. But once the EEOC completed “its processing of the action,” employees like Loya were explicitly required to “use arbitration if they wish to pursue further legal rights, rather than filing a lawsuit on the action.” The record clearly shows, and Loya admits in her pleadings, that after she filed a charge of discrimination with the EEOC, the Tex-as Workforce Commission (through its work sharing agreement vrith the EEOC) subsequently issued a right to sue letter. As a matter of law, therefore, the exclusion covering EEOC proceedings did not apply because the administrative agency had completed its processing of the action, and Loya’s claims as alleged in her lawsuit fell within the scope of the 2011 arbitration agreement.
CONCLUSION
The trial court abused its discretion in refusing to compel arbitration under a valid and enforceable arbitration agreement. Accordingly, the trial court’s order denying FirstLight’s motion to compel arbitration is vacated, and the case is remanded to the trial court with instructions to enter an order granting the motion to compel arbitration and staying all proceedings pending arbitration.
Notes
. While Loya filed a response to FirstLight’s motion to compel, she did not present any evidence to the trial court.
. Parties may expressly agree to arbitrate under the Federal Arbitration Act. In re AdvancePCS Health L.P., 172 S.W.3d 603, 605-06 & n. 3 (Tex.2005) (orig. proceeding) (per curiam). Although Loya opposes arbitration generally, she does not contest the application of the FAA. See In re Rubiola,
.The agreement noted that: “Examples of the type of disputes or claims covered by this policy include claims for wrongful termination of employment, breach of contract, employment discrimination, harassment or retaliation under the Americans With Disabilities Act, the Age Discrimination In Employment Act, the Texas Labor Code or the New Mexico Human Rights Act and any state or local discrimination laws, tort claims, defamation claims, or any other legal claims and causes of action recognized by local, state or federal law or regulations.”
. FirstLight began outsourcing certain "back office" payroll functions to a third-party payroll service in 2005, and in 2011, expanded (he scope of those services to include human resources support. The human resources functions were accomplished through software FirstLight purchased and licensed from the service provider.