In re Rls Legal Solutions, LLC

• Decision Date: 20 April 2007
• Docket Number: No. 05-0290.,05-0290.
• Citation: 221 S.W.3d 629
• Parties: In re RLS LEGAL SOLUTIONS, LLC, and Yandell Rogers, III, Relators.
• Court: Texas Supreme Court

221 S.W.3d 629

In re RLS LEGAL SOLUTIONS, LLC, and Yandell Rogers, III, Relators.

No. 05-0290.

Supreme Court of Texas.

April 20, 2007.

Victor Navasca Corpuz, Kristin Leigh Bauer, Jackson Lewis LLP, Dallas, Roger S. McCabe, Mehaffy & Weber, Beaumont, for Relators.

Glen W. Morgan, Mary Ferguson Bradford, Reaud Morgan & Quinn, L.L.P., Beaumont, for Real Party in Interest.

PER CURIAM.

The court of appeals held that the trial court did not abuse its discretion in denying relators' motion to compel arbitration of this employment dispute on the basis that relators used economic duress to force the plaintiff to agree to arbitration. In re RLS Legal Solutions, L.L.C., 156 S.W.3d 160, 165 (Tex.App.-Beaumont 2005). But the plaintiff's only evidence is that she was under duress to sign an employment agreement containing an arbitration provision; there is no evidence that she was under duress specifically to agree to arbitration apart from the other provisions of the agreement. We held in In re FirstMerit Bank, N.A., that duress and other such defenses must "specifically relate to the Arbitration Addendum itself, not the contract as a whole, if they are to defeat arbitration. Defenses that pertain to the entire . . . contract can be arbitrated." 52 S.W.3d 749, 756 (Tex.2001) (footnotes omitted). Accordingly, we grant relators' petition for mandamus to compel arbitration.

Relator RLS Legal Solutions, L.L.C. employed Amy Cobb Maida as a sales representative from 1997 to 2002. During the latter part of her employment, when relator Yandell Rogers was the chief financial officer of RLS, Maida signed several agreements to arbitrate disputes with RLS. But when RLS asked her to sign a new agreement in November 2001, she objected. The eight-page, single-spaced agreement contained numerous provisions related to term, compensation, non-competition, arbitration, and other subjects. Maida testified that RLS told her she would not be paid if she did not sign the agreement. RLS paid Maida a base salary every other Friday and a commission once each month by direct deposit to her account. On November 2 RLS made a $1,416.59 salary payment to her account, but it made no such payment on November 16, although it did make a direct deposit that day of $2,690.43 for her commission. Maida testified that she agonized over the weekend and signed the new agreement on Monday, November 19, specifically telling RLS she was under duress. At that time, RLS gave her a check for her salary. RLS contends that it prepared the check Friday but that Maida was not in the office that day to pick it up. Maida disputes that this happened.

The parties agree the Federal Arbitration Act, 9 U.S.C. §§ 1-16, applies to the arbitration provision within the employment agreement. Maida argues that the arbitration provision is not enforceable because RLS improperly withheld her salary payment to force her to accept the arbitration provision. We take Maida's version of the facts as true and assume, without deciding, that she has made out a case of economic duress. But there is no evidence the duress she claimed RLS exerted on her was directed at her agreeing to the arbitration provision as distinct from the agreement as a whole. Both an affidavit by Maida and her trial testimony provide some evidence that she objected to the arbitration provision specifically. She stated in her affidavit:

I was . . . told . . . that there were, "no exceptions" to the "new" arbitration clause that I was made to sign and that "nothing was negotiable or up for discussion."

* * *

After I refused to agree to this arbitration clause, I was told that my payroll checks would not be direct deposited into my account until I signed the agreement and . . . . ...