IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

AFFINIPAY, LLC AND AFFINIPAY

PARENT, LLC,

Plaintiffs,

v.

THOMAS WEST,

Defendant.

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C.A. No. 2021-0549-LWW

MEMORANDUM OPINION

Date Submitted: August 19, 2021

Date Decided: September 17, 2021

Rudolf Koch and Ryan D. Konstanzer, RICHARDS, LAYTON, & FINGER, P.A.,

Wilmington, Delaware; Joseph P. Rockers and Batoul Husain, GOODWIN 

PROCTER LLP, Boston, Massachusetts; Counsel for Plaintiffs AffiniPay, LLC and 

AffiniPay Parent, LLC

Peter B. Ladig, Thad J. Bracegirdle, and Justin C. Barrett, BAYARD, P.A.,

Wilmington, Delaware; Counsel for Defendant Thomas West

WILL, Vice Chancellor
1

This case arises from a disagreement over the number of vested options and 

the valuation of incentive units granted to a former Chief Executive Officer. The 

underlying dispute is subject to arbitration. The only issue presented to this court is 

where and how those claims should be properly adjudicated.

The parties negotiated a series of agreements to govern the former officer’s 

option grants and incentive units. Those agreements contain a trio of dispute 

resolution provisions that call for different arbitral forums applying different arbitral 

procedures. The agreements each contemplate that the arbitrator (albeit different 

arbitrators) will decide the question of arbitrability.

The former officer—the defendant in this action—has initiated an arbitration 

proceeding applying procedures called for in one of the agreements. The plaintiff—

his former employer—contends that the arbitration violates the dispute resolution 

provisions in the other two agreements, which are relevant to the former officer’s 

claims. The plaintiff asks that I preliminary enjoin those claims from proceeding in 

the pending arbitration. The former officer asserts that this court lacks subject matter 

jurisdiction to decide the preliminary injunction motion because the parties 

delegated the issue of substantive arbitrability to the arbitrator. He has moved to

dismiss on that basis. 

In this decision, I conclude that it is impossible to discern which arbitrator the 

parties intended to decide the matter of arbitrability given the parties’ agreement to 
2

three different dispute resolution provisions. The court therefore has subject matter 

jurisdiction to resolve that dispute and the defendant’s motion to dismiss is 

denied. Because the plaintiff has demonstrated that the elements of a preliminary 

injunction are satisfied, I grant the plaintiff’s motion and preliminary enjoin the 

equity-based claims from proceeding in the pending arbitration. 

I. FACTUAL BACKGROUND

The following facts are drawn from the Verified Complaint and the documents

it incorporates by reference.1

A. The Employment Agreement

Plaintiffs AffiniPay, LLC and AffiniPay Parent, LLC (together, “AffiniPay”) 

are Delaware entities with their principal places of business in Austin, Texas.2 

AffiniPay is a fintech market leader providing payment technology services to legal, 

accounting, and association professionals throughout the United States.3 Defendant 

Thomas West, a resident of Texas, was hired by AffiniPay on September 4, 2018 to 

1 Verified Compl. (“Compl.”) (Dkt. 1). See Winshall v. Viacom Int’l, Inc., 76 A.3d 808, 

818 (Del. 2013) (“[A] plaintiff may not reference certain documents outside the complaint 

and at the same time prevent the court from considering those documents’ actual terms.”); 

Freedman v. Adams, 2012 WL 1345638, at *5 (Del. Ch. Mar. 30, 2012) (“When a plaintiff 

expressly refers to and heavily relies upon documents in her complaint, these documents 

are considered to be incorporated by reference into the complaint . . . .”), aff’d, 58 A.3d 

414 (Del. 2013).

2 Compl. ¶ 11. 

3

Id. ¶¶ 2, 15.
3

serve as its Chief Growth Officer and later became its Chief Executive Officer.4 

Upon his hiring, West and AffiniPay entered into an Employment Agreement 

outlining West’s duties, compensation and benefits, and other aspects of West’s 

employment.5

West was granted options in AffiniPay that vested over time as part of his 

compensation package.6 The Employment Agreement states in Section 3(D) that 

West would be “granted an option . . . under the AffiniPay Holdings LLC Unit 

Option Plan” (the “2016 Option Plan”) to purchase incentive units in AffiniPay.7 

The Employment Agreement also provides that the options would be “subject to all 

other terms and conditions set forth in the [2016] Option Plan” and to the parties’ 

September 4, 2018 Unit Option Award Agreement (the “Award Agreement”).8 

The vesting schedule included in Section 3(D) of the Employment Agreement 

explains that, “[i]n the event of [West’s] termination of employment with 

[AffiniPay] for any reason,” the options may be cancelled or repurchased by 

AffiniPay “in accordance with the terms of the [2016] Option Plan and [A]ward 

4

Id. ¶¶ 2, 16.

5

Id. ¶ 16.

6

Id. ¶ 3.

7 Compl. Ex. B § 3(D).

8

Id.
4

[A]greement.”9 Section 3(D) of the Employment Agreement further explains that 

“to the extent the terms of the [2016] Option Plan or Award Agreement conflict with 

this Section 3(D), the terms of the [2016] Option Plan or Award Agreement shall 

control.”10

The Employment Agreement includes an arbitration clause: 

[A]ny and all disputes or claims arising out of or relating to [the 

Employment Agreement] or concerning [West’s] employment with 

[AffiniPay] or termination thereof shall be settled by final and binding 

arbitration to be conducted in Austin, Texas, under the then existing 

Employment Arbitration and Mediation Procedures [Employment 

Arbitration Rules]) of the American Arbitration Association (‘AAA’).11

The arbitration clause further provides that “[a]ny disagreement as to whether a 

particular dispute is arbitrable under [the Employment Agreement] will itself be 

subject to determination by the arbitrator in arbitration in accordance with the 

procedures set forth herein.”12 

B. The Award Agreement and 2016 Option Plan

On September 4, 2018, AffiniPay granted options to West pursuant to the 

Award Agreement.13 The Award Agreement provides that the options were issued 

“upon the terms and conditions set forth in the [2016 Option Plan]” and “[s]ubject 

9

Id.

10 Id.

11 Compl. Ex. B at 10-11.

12 Id. at 11.

13 Compl. ¶ 18, Ex. C § 1.
5

to the terms and conditions” of the Award Agreement.14 The Award Agreement 

contains a vesting schedule that is generally consistent with the vesting schedule in 

the Employment Agreement but provides additional details about the forfeiture and 

repurchase of the options in the event of West’s termination.15 The 2016 Option 

Plan gives AffiniPay the right to repurchase incentive units acquired through options 

granted under the 2016 Option Plan at a defined fair market value if West is 

terminated for any reason.

16

Disputes related to the Award Agreement are governed by Section 12 of the 

2016 Option Plan.17 Section 12 also includes an arbitration clause: 

Any dispute between [AffiniPay] and [West] as to the interpretation of any 

provision of the [2016 Option Plan] or [the] Award Agreement or the rights 

and obligations of any party thereunder . . . will be resolved through binding 

arbitration as hereinafter provided in Austin, Texas . . . in accordance with the 

Commercial Arbitration Rules of the [AAA] then in effect.

18

 

Section 12 sets out the procedures that would govern any such arbitration.19

14 Compl. Ex. C (Preamble), § 1.

15 See Compl. Ex. B § 3(D), Ex. C §§ 2-3.

16 Compl. Ex. D § 9; see also id. § 2 (definitions of “Fair Market Value” and “Repurchase 

Event”).

17 Compl. ¶ 19, Ex. D § 12.

18 Compl. Ex. D § 12.

19 Id. § 12(a).
6

C. The Rollover Agreement

On February 28, 2020, private equity firm TA Associates acquired a majority 

interest in AffiniPay.20 The sale transaction triggered vesting acceleration provisions 

in the Award Agreement and the Employment Agreement, causing a portion of 

West’s options to vest.21 In connection with TA Associates’ acquisition of 

AffiniPay, West entered into a Unit Option Rollover Agreement (the “Rollover 

Agreement”) with AffiniPay.22

Under the Rollover Agreement, West exchanged his options for new, postdeal options (referred to as the “New Options” in the Rollover Agreement) that 

would allow West to purchase common units of AffiniPay Parent, LLC.23 The 

Rollover Agreement provides that the New Options West received post-rollover

would “be governed by the same terms and conditions of the [2016 Option Plan and 

the Award Agreement],” including with respect to vesting.24 The Rollover 

Agreement does not reference the Employment Agreement other than to adopt its 

20 Compl. ¶ 20, Ex. A ¶ 5.

21 Compl. ¶ 20, Ex. A ¶ 5, Ex. B § 3(D), Ex. C § 2.2.

22 Compl. ¶ 21, Ex. G (Preamble).

23 Compl. ¶ 21, Ex. G §§ 1-2.

24 Compl. Ex. G § 2(c). The Rollover Agreement incorporated the terms of the Award 

Agreement and Options Agreement except “that all references in the [Award Agreement 

and 2016 Option Plan] to the ‘Company’ shall be deemed to be references to [AffiniPay 

Parent, LLC], and upon exercise of any New Option(s), [West] shall be entitled to receive 

[common units of AffiniPay Parent, LLC].” Id.
7

definition of “Cause.”

25

 The Rollover Agreement also contains an integration clause 

providing that it and “the agreements and documents referred to” in it constitute the 

complete agreement between the parties on its subject matter and supersede any prior 

understandings or agreements.26

D. The Profit Interest Agreement and 2020 Option Plan

On June 24, 2020, AffiniPay granted West incentive units in AffiniPay Parent, 

LLC pursuant to a Profit Interest Award Agreement (the “Profit Interest 

Agreement”).27 The Profit Interest Agreement explains that the units were granted 

under the Company’s 2020 Unit Option and Grant Plan (“2020 Option Plan”), which 

replaced the 2016 Option Plan post-acquisition, and “subject to the terms and

conditions set forth” in the Profit Interest Agreement.

28

 

The Profit Interest Agreement contains a vesting schedule for the incentive 

units.29 The 2020 Option Plan gives AffiniPay the right to repurchase West’s vested 

units upon his termination at a defined “Fair Market Value” determined in 

accordance with the 2020 Option Plan.30 

25 Id.

26 Compl. Ex. G § 7.

27 Compl. ¶ 22, Ex. E (Preamble).

28 Compl. Ex. E (Preamble).

29 Compl. Ex. E § 1.

30 Compl. Ex. F § 9.
8

The Profit Interest Agreement also contains an arbitration clause in Section 

5(j) to govern disputes about the incentive units:

The parties hereto agree that any dispute or controversy arising out of, 

relating to, or in connection with [the Profit Interest Agreement] or the 

transactions contemplated hereby shall be arbitrated pursuant to the 

Delaware Rapid Arbitration Act, 10 Del. C. § 5801 et seq.31

Section 5(j) goes on to outline other terms and procedures to govern any arbitration, 

including that the arbitration “shall be conducted in accordance with the Delaware 

Rapid Arbitration Rules.”32

E. The Arbitration

On March 3, 2021, AffiniPay terminated West and provided him with a 

proposed separation agreement.33 The separation agreement identified the number 

of West’s options that AffiniPay claims had vested and informed West that 

AffiniPay was electing to repurchase his incentive units at their “Fair Market 

Value.”

34

 West disputed AffiniPay’s calculation of the number of options that had 

vested and AffiniPay’s valuation of his incentive units.35 He refused to sign the 

separation agreement and asserted that he was entitled to more than double the 

number of vested options under his interpretation of the vesting provisions in the 

31 Compl. Ex. E § 5(j).

32 Id.

33 Compl. ¶ 24, Ex. A ¶¶ 9, 10, 16.

34 Compl. ¶ 24.

35 Id. ¶ 25; see Compl. Ex. A ¶¶ 18-21.
9

Award Agreement and to a higher value for his incentive units.36 AffiniPay 

responded that it viewed the vesting calculation to be consistent with the terms of 

the Award Agreement, 2016 Option Plan, and Rollover Agreement and the 

determination of “Fair Market Value” to be consistent with the terms of the Profit 

Interest Agreement and 2020 Option Plan.37 West did not respond and the separation 

agreement went unsigned. 

On May 11, 2021, West filed a demand for arbitration in Austin, Texas 

pursuant to the Employment Arbitration Rules of the AAA (the “Arbitration”).38 

West brings five claims in the Arbitration, two of which are relevant here. First, 

West asserts a breach of contract claim against AffiniPay (Count 4), alleging that 

AffiniPay “breached [the Employment Agreement] by refusing to place the 

appropriate value on West’s [options] and by attempting to manipulat[e] his vesting 

schedule to deprive him of additional options.”39 Second, West asserts a fraud claim 

against AffiniPay (Count 5), alleging that “AffiniPay committed fraud by 

manipulating a vesting schedule.”40 The allegations in West’s Summary of Claim 

seem to concern both the vesting schedule of his rolled-over New Options and the 

36 Compl. ¶ 25. 

37 Id. ¶ 26. 

38 Id. ¶ 27.

39 Compl. Ex. A ¶¶ 36-39.

40 Id. ¶¶ 40-41.
10

value of the incentive units AffiniPay had elected to buy back.41 During oral 

argument in this action, West’s attorney argued that West only intended to bring 

claims pursuant to the Employment Agreement.42

F. Procedural Posture

On June 22, 2021, AffiniPay filed this action seeking declaratory and 

injunctive relief to prevent West from arbitrating his equity-related claims in the 

Arbitration. AffiniPay filed a motion for a preliminary injunction on the same day. 

On July 2, 2021, the court approved a stipulation between the parties staying the 

pending Arbitration until September 19, 2021.43 On July 26, 2021, West moved to 

dismiss the complaint under Court of Chancery Rule 12(b)(1) for lack of subject 

matter jurisdiction or, alternatively, “to stay this action pending the . . . arbitrator’s 

determination of [the issue of] arbitrability.”44 The court heard argument on both 

the motion for a preliminary injunction and motion to dismiss on August 19, 2021.45

II. LEGAL ANALYSIS

This decision must address two issues. First, I must determine whether the 

court has subject matter jurisdiction to decide the issue of substantive arbitrability. 

41 Id. ¶¶ 16, 20-21.

42 Oral Arg. Tr. 34 (Dkt. 38).

43 Dkt. 19.

44 Dkt. 26.

45 Dkt. 36.
11

If the issue of substantive arbitrability rests in this court, rather than with the 

arbitrator, I must assess whether AffiniPay is entitled to an injunction to prevent the 

equity-based claims from being heard in the Arbitration. 

Court of Chancery Rule 12(b)(1) governs the first question. “In considering 

a motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction, the 

court must address the nature of the wrong alleged and the remedy sought to 

determine whether a legal, as opposed to an equitable, remedy is available and 

adequate.”46 “If a claim is arbitrable, i.e., properly committed to arbitration, this 

Court lacks subject matter jurisdiction because arbitration provides an adequate legal 

remedy.”47

The second question must be evaluated under the standard for a preliminary 

injunction. To obtain a preliminary injunction, the moving party “must demonstrate 

(i) a reasonable probability of success on the merits; (ii) a threat of irreparable injury 

if an injunction is not granted; and (iii) that the balance of the equities favors the 

issuance of an injunction.”

48

For the reasons discussed below, I find that both questions must be answered 

in the affirmative. Because the contracts at issue have conflicting dispute resolution 

46 Julian v. Julian, 2009 WL 2937121, at *3 (Del. Ch. Sept. 9, 2009).

47 Id.

48 Pell v. Kill, 135 A.3d 764, 783 (Del. Ch. 2016).
12

provisions, the court—rather than the arbitrator—must decide the question of 

substantive arbitrability. Subject matter jurisdiction is therefore proper in this court. 

An analysis of those same contracts, which are implicated by West’s equity-based 

claims and contain separate arbitration provisions, also leads me to conclude that the 

Arbitration must be enjoined. 

A. This Court Has Subject Matter Jurisdiction to Decide Substantive 

Arbitrability.

1. Substantive Arbitrability Generally

Substantive arbitrability is the question of whether a dispute is within the 

scope of an arbitration provision and, therefore, subject to arbitration.49 Delaware 

courts follow the “general rule, announced by the United States Supreme Court . . . 

that courts should decide” the issue of substantive arbitrability.50 That rule has an 

important exception: when parties delegate issues of arbitrability to an arbitrator, “a 

court . . . possesses no power to decide the arbitrability issue.”51 For that exception 

to apply, however, there must be clear and unmistakable evidence that the parties 

intended to delegate issues of arbitrability to an arbitrator.52 That is so “even if the 

49 UPM-Kymmene Corp. v. Renmatix, Inc., 2017 WL 4461130, at *4 (Del. Ch. Oct. 6, 

2017).

50 James & Jackson, LLC v. Willie Gary, LLC, 906 A.2d 76, 78 (Del. 2006).

51 Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529 (2019).

52 See Willie Gary, 906 A.2d at 78; see also First Options of Chi., Inc. v. Kaplan, 514 U.S. 

938, 944 (1995) (explaining that “[c]ourts should not assume that the parties agreed to 
13

court thinks that the argument that the arbitration agreement applies to a particular 

dispute is wholly groundless.”53

The Federal Arbitration Act (FAA) governs disputes over the arbitrability of 

contracts involving interstate commerce.

54

 The FAA, in turn, implicates state law 

contract principles. “When deciding whether the parties agreed to arbitrate . . . [the 

issue of] arbitrability” under the FAA, “courts generally . . . should apply ordinary 

state-law principles that govern the formation of contracts.”55

In Willie Gary, the Delaware Supreme Court explained that contractual 

parties’ “clear and unmistakable intent” to submit arbitrability issues to an arbitrator 

is found “where the arbitration clause generally provides for arbitration of all 

disputes and also incorporates a set of arbitration rules that empower[s] arbitrators 

arbitrate [the issue of] arbitrability unless there is ‘clea[r] and unmistakabl[e]’ evidence 

that they did so”).

53 Henry Schein, 139 S. Ct. at 529.

54 9 U.S.C. § 2.

55 See First Options, 514 U.S. at 940; Ario v. Underwriting Members of Syndicate 53 at 

Lloyds for 1998 Year of Acct., 618 F.3d 277, 288 (3d Cir. 2010), as amended (Dec. 7, 

2010).
14

to decide arbitrability.”56 Delaware courts routinely apply Willie Gary in resolving 

a question of substantive arbitrability.57

The analysis becomes complicated when the court is faced with multiple 

agreements providing for dispute resolution in different arbitral forums. This court

has cautioned that the Willie Gary framework should not be applied “reflexively in 

the multiple-contract scenario.”58 Rather, if various contracts are implicated in a 

claim and those contracts diverge on the matter of arbitral dispute resolution, Willie 

Gary’s requirement that a provision mandate the arbitration of “all disputes” is 

impossible to satisfy.59 It then falls to the court to determine substantive 

56 906 A.2d 76, at *80. In McLaughlin v. McCann, then-Vice Chancellor Strine added a 

third consideration before a court will resolve substantive arbitrability: that there be 

“essentially no non-frivolous argument about [issues of] . . . arbitrability to make before 

the arbitrator.” 942 A.2d 616, 627 (Del. Ch. 2008). The United States Supreme Court’s

decision in Henry Schein renders that consideration a nullity. In Henry Schein, the Court 

explained that a court cannot rule on the merits of an underlying claim, even if the claim 

appears frivolous to the court, when parties clearly delegate the issue of substantive 

arbitrability to an arbitrator. Henry Schein, 139 S. Ct. 529.

57 See UPM-Kymmene, 2017 WL 4461130, at *4 n.29 (collecting cases).

58 Id. at *6.

59 TowerHill Wealth Mgmt, LLC v. Bander Fam. P’ship, 2008 WL 4615865, at *3 (Del. 

Ch. Oct. 9, 2008) (“[W]here there are various dispute resolution clauses in play in various 

contracts, it is impossible to select one and say it applies generally to all disputes.”). 
15

arbitrability.60 That is so even where the dispute resolution provisions reserve 

questions of arbitrability for the arbitrator.61

Then-Chancellor Bouchard’s decision in UPM-Kymmene Corp. v. Renmatix 

Inc. is instructive. There, the parties entered into two contracts with conflicting 

arbitration clauses. Both clauses empowered an arbitrator to decide issues of 

arbitrability, but the first contract called for resolution before the International 

Chamber of Commerce (ICC) and the second contract contemplated arbitration 

before the AAA.

62 The first contract’s arbitration clause governed all disputes 

between the parties.63 The second contract’s arbitration clause governed all disputes 

under the second contract.64 Although the party demanding arbitration in UPM

asserted its claims before the AAA under the second contract, the court found that 

both agreements—which were intended to operate concurrently—were in play.

65

Faced with dueling arbitration clauses, the court could not conclude that there was a 

“clear and unmistakable intention . . . that the parties wished to have one arbitrator 

60 See id. at *3 (explaining that the court has jurisdiction to decide issues of substantive 

arbitrability where an arbitration was brought under one contract but claims implicated 

other contracts that mandated dispute resolution by the court). 

61 UPM-Kymmene, 2017 WL 4461130, at *7.

62 Id. at *2.

63 Id.

64 Id.

65 Id. at *5-7.
16

rather than the other determine where the Demands should be arbitrated.”66 The 

issue of arbitrability was therefore left for the court to decide.

2. Substantive Arbitrability in This Case

As in UPM, this court must assess whether the relevant contracts evidence 

the parties’ clear and unmistakable intent to submit substantive arbitrability to the 

arbitrator. The initial question is whether there are multiple contracts at issue. West

asserts that his breach of contract and fraud claims in the Arbitration are brought 

only under the Employment Agreement.67 That is so, West argues, because he seeks 

to remedy AffiniPay’s alleged violation of the Employment Agreement by 

undervaluing his shares and manipulating the relevant vesting schedule after his 

termination.68 If the Arbitration concerns only the Employment Agreement as he 

claims, then under Willie Gary, the dispute resolution provision in the Employment 

66 Id. at *7.

67 Def.’s Opp. Br. at 39 (Dkt. 27).

68 Id. at 38-39. In further support of his argument, West cites several cases that he says are 

examples of courts following the Willie Gary test and deferring issues of arbitrability to 

arbitrators. See Pls.’ Opening Br. at 32-37, 40-43 (Dkt. 22) (citing Celestialrx Invs., LLC 

v. Krivulka, 2019 WL 1396764 (Del. Ch. Mar. 27, 2019); Chemours Co. v. DowDuPont 

Inc., 2020 WL 1527783 (Del. Ch. Mar. 30, 2020); Dewey v. Amazon.com, Inc., 2019 WL 

3384769 (Del. Super. Ct. July 25, 2019); Blackmon v. O3 Insight, Inc., 2021 WL 868559 

(Del. Ch. Mar. 9, 2021)). There is a fundamental difference between the facts at issue in 

those disputes and this case: none address dueling arbitration clauses. This court’s decision 

in Celestialrx comes the closest. There, the parties entered into multiple agreements with 

differing arbitration clauses, but the court found that only one arbitration clause was 

implicated by the claims. Here, West’s claims implicate at least two (maybe three) 

different arbitration clauses.
17

Agreement would mandate that arbitrability be addressed in arbitration under the 

Employment Arbitration Rules of the AAA.

69 The pending Arbitration is being 

conducted in accordance with those rules.

70

AffiniPay, for its part, argues that West’s claims cannot be decided without 

also considering the 2016 Option Plan and Profit Interest Agreement.71 The 

Employment Agreement, 2016 Option Plan, and Profit Interest Agreement each 

contain a dispute resolution provision empowering a different arbitrator to determine 

arbitrability.72 As a result, AffiniPay contends, there is no clear and unmistakable 

evidence that the parties intended for one particular arbitrator to decide that issue.73 

After reviewing the relevant contracts, I conclude that AffiniPay has the better 

of the arguments. West is correct that the dispute resolution provision in the

Employment Agreement evidences the clearest intent of the parties to submit the 

issue of substantive arbitrability to the arbitrator. It provides that “any and all 

disputes” arising out of the Employment Agreement or concerning West’s 

employment or termination from AffiniPay must be settled by arbitration under the 

69 Compl. Ex. B at 11. The AAA Employment Arbitration Rules provide that “[t]he 

arbitrator shall have the power to rule on his or her own jurisdiction.” AAA Empl. Proc. 

Rule R–6.

70 Def.’s Opp. Br., Ex. 3 at 1.

71 Pls.’ Opening Br. at 15 (Dkt. 22).

72 Compl. Ex. B at 10-11, Ex. D § 12, Ex. E § 5(j).

73 Pls.’ Opening Br. at 16.
18

AAA Employment Arbitration Rules, including “any disagreement as to whether a 

dispute is arbitrable under the [Employment Agreement].”74 If the Employment 

Agreement was the only contract relevant to West’s equity-based claims, the Willie 

Gary test would apply for the reasons discussed above. 

But there are other relevant contracts that contain conflicting dispute 

resolution provisions, making that conclusion impossible. The parties agreed in 

Section 3(D) of the Employment Agreement that West’s options would be awarded 

“subject to all other terms and conditions set forth in the [2016] Option Plan and the 

[Award Agreement].”75 In other words, even if West’s equity claims in the 

Arbitration are viewed narrowly to concern his options granted under the Award 

Agreement, the terms of the 2016 Option Plan must be considered. 

Both the Employment Agreement and 2016 Option Plan contemplate 

arbitration before the AAA in Austin, Texas.76 But they adopt different arbitration 

rules: the AAA Employment Arbitration Rules in the Employment Agreement, and 

the AAA Commercial Arbitration Rules in the 2016 Option Plan.77 Although both 

sets of rules delegate the issue of substantive arbitrability to the arbitrator, the rules 

74 Compl. Ex. B at 11.

75 Compl. Ex. B § 3(D).

76 Compl. Ex. B at 10-11, Ex. D § 12.

77 Id.
19

are not identical.

78 In application, the rules could lead to different results, for 

example, in the selection of an arbitrator with particular expertise or in the 

procedures that would apply.

The dispute resolution provision in a third agreement that may be relevant—

the Profit Interest Agreement—creates more uncertainty. As described in the next 

section of this decision, the valuation allegations in West’s breach of contract claim 

could be read to arise, at least in part, out of the Profit Interest Agreement.79 That 

agreement contains a dispute resolution provision that mandates arbitration under 

the Delaware Rapid Arbitration Act.80 The Delaware Arbitration Rules also provide 

that the arbitrator has the authority “to resolve, finally and exclusively, any dispute 

of substantive or procedural arbitrability.”81

The “policy that favors alternative dispute resolution mechanism, such as 

arbitration, does not trump basic notions of contract interpretation.”82 Faced with

two (perhaps three) dispute resolution clauses that are in tension, it is impossible to 

discern which arbitrator (and which rules) the parties intended would determine the 

78 See generally AAA. Com. Rules; AAA Empl. Proc. Rules.

79 See infra Section II.B.1.b. 

80 Compl. Ex. E § 5(j); see 10 Del. C. § 5703(b).

81 See Del. Rapid Arb. R. 6. 

82 Hough Assoc., Inc. v. Hill, 2007 WL 148751, at *13 (Del. Ch. Jan. 17, 2007) (quoting 

Parfi Hldg. AB v. Mirror Image Internet, Inc., 817 A.2d 149, 156 (Del. 2002)). 
20

matter of arbitrability. There is no clear and unmistakable evidence that the parties 

intended to delegate substantive arbitrability to an arbitrator under the AAA 

Employment Arbitration Rules, as West has done. This court, rather than the 

arbitrator, must decide the issue of substantive arbitrability.83

B. The Arbitration Must Be Enjoined as to West’s Equity Claims.

Because subject matter jurisdiction is proper in this court,84 the remaining 

question is whether West’s equity claims are subject to arbitration under the dispute 

resolution provision in the Employment Agreement. AffiniPay seeks a preliminary 

injunction preventing West from pursing in the Arbitration any claims about the 

vesting schedule applicable to West’s options in AffiniPay or the fair market value 

of West’s incentive units.

85 I conclude that because AffiniPay has satisfied the 

standard for a preliminary injunction, West must be preliminarily enjoined from 

pursuing claims related to those issues in the pending Arbitration. 

1. Reasonable Probability of Success on the Merits

AffiniPay’s complaint seeks injunctive relief and a declaratory judgment that

West must pursue his claims about the vesting schedule applicable to his AffiniPay 

options in an arbitration that complies with Section 12 of the 2016 Option Plan and 

83 See UPM-Kymmene, 2017 WL 4461130, at *7.

84 The court also has subject matter jurisdiction to order a preliminary injunction related to 

the Arbitration. See 10 Del. C. § 341; 10 Del. C. § 5804(b); see also Eastman Kodak Co. 

v. Cetus Corp., 1991 WL 202184, at *2 (Del. Ch. Oct. 4, 1991). 

85 Dkt. 3.
21

about the valuation of his incentive units in an arbitration that complies with Section 

5(j) of the Profit Interest Award.86 West contends that his claims arise only from the 

Employment Agreement and that, as the claimant in the Arbitration, he is entitled to 

that narrow framing.87

A review of West’s claims belies his position. First, West’s equity-based 

allegations in the Arbitration are about the options he was originally promised

pursuant to the Employment Agreement. West’s Summary of Claim in the 

Arbitration accuses AffiniPay of manipulating the vesting schedule for his New 

Options post-rollover.88 Those allegations go to West’s breach of contract claim 

(Count IV) that AffiniPay has “attempt[ed] to manipulate his vesting schedule to 

deprive him of additional options” and his fraud claim (Count V) that AffiniPay 

“manipulat[ed] a vesting schedule for which there was no consideration.”89 I will 

refer to West’s claims about manipulation of his vesting schedule as the “Vesting 

Claim.” West’s Summary of Claim also challenges AffiniPay’s valuation of the 

incentive units he was awarded after the sale transaction as being below fair value.

90

Those allegations pertaining to his claim in Count IV that AffiniPay has “refus[ed] 

86 Compl. ¶ 40. 

87 Def.’s Opp. Br. at 39.

88 Compl. Ex. A ¶¶ 19, 20. 

89 Id. ¶¶ 38, 41.

90 Id. ¶ 21. 
22

to place the appropriate value on West’s stock.”91 I will refer to that claim as the 

“Valuation Claim.”

a. The Vesting Claim

With regard to West’s Vesting Claim, I begin—as I must—with a review of 

the Employment Agreement. The Employment Agreement is governed by Texas 

law,92 which, like Delaware law, requires courts to “afford common words their plain 

meaning unless context indicates the word are used in another sense.”93 A court 

must “consider the entire agreement in an effort to harmonize and give effect to all 

provisions so that none are rendered meaningless.”94 

The Employment Agreement contains a broad arbitration provision applying 

to “all disputes or claims arising out of or relating to th[at] Agreement.”95 But, in 

determining whether AffiniPay has a reasonable probability of showing that the 

Vesting Claim is not properly raised in the Arbitration, the plain language of Section 

3(D) cannot be ignored. Section 3(D) says that West “will be granted an option”

and contains a vesting schedule but unambiguously states that the option will be

“subject to all other terms and conditions set forth in the [2016] Option Plan and the 

91 Id. ¶ 38. 

92 Compl. Ex. B at 10-11 (“The laws of the State of Texas shall govern this agreement.”). 

93 N. Nat. Gas Co. v. Oneok Bushton Processing, Inc., 2012 WL 4364652, at *2 (Tex. App. 

Sept. 25, 2012).

94 Id.

95 Compl. Ex. B at 10-11. 
23

[Award Agreement].”96 Moreover, the Employment Agreement states that if there 

is any conflict between Section 3(D) and the 2016 Option Plan or Award Agreement

the terms of the latter “shall control.”97 

It is reasonable to interpret those provisions as evidencing the parties’ intent 

that the Award Agreement granting the options and the 2016 Option Plan providing 

the terms for the grant would govern the option West was promised in the 

Employment Agreement. The Award Agreement contains a detailed vesting 

schedule and explains that the options will “vest and [be] exercisable only in 

accordance with the conditions stated in” Section 2 of the Award Agreement.98 The 

Award Agreement also provides that the options were granted “[p]ursuant to the 

provisions of the [2016 Option Plan].”99

The 2016 Option Plan is subject to Delaware law.100 “Delaware law adheres 

to the objective theory of contracts, i.e., a contract’s construction should be that 

which would be understood by an objective, reasonable third party.”101 This court 

96 Compl. Ex. B § 3(D). 

97 Id.

98 Compl. Ex. C § 2. 

99 Id. (Preamble). 

100 Compl. Ex. D § 11 (“[The 2016 Option Plan] shall be subject to the governing law 

provision set forth in the LLC Agreement.”); Konstanzer Decl. Ex. 1 (2015 AffiniPay 

Holdings LLC Agreement) § 12.16 (applying Delaware law).

101 Salamone v. Gorman, 106 W.3d 354, 367-68 (Del. 2014). 
24

will review an agreement as a whole and give effect to each term and provision “so 

as not to render any part of the contract mere surplusage.”102 The 2016 Option Plan 

contains an arbitration clause requiring that “[a]ny dispute . . . as to the interpretation 

of any provision of the [2016 Option Plan] or [the] Award Agreement or the rights 

and obligations of any party thereunder” be arbitrated under the AAA Commercial 

Arbitration Rules.

103 In construing each of the relevant agreements, there is a 

reasonable basis to conclude that parties intended that claims about West’s options 

would be adjudicated under that provision.

The subsequent rollover of West’s options confirms that AffiniPay may 

ultimately be able to demonstrate that the dispute resolution provision in the 2016 

Option Plan applies to West’s Vesting Claim. The Rollover Agreement, which is 

subject to Delaware law, provides that West’s AffiniPay options would be 

exchanged into New Options to purchase parent units at the closing of the sale 

transaction.

104

 The Rollover Agreement explains that those New Options are 

“governed by the same terms and conditions of the [Award Agreement and 2016 

Option Plan].”105 If that is the case, the Vesting Claim must be resolved in arbitration 

under the AAA Commercial Arbitration Rules, as the 2016 Option Plan requires.

102 Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010). 

103 Compl. Ex. D § 12.

104 Compl. Ex. G §§ 1-2, 7.

105 Id. § 2.
25

b. The Valuation Claim

Because West’s Valuation Claim is styled as one for breach of the 

Employment Agreement, my analysis again begins with that contract. Section 3(D) 

of the Employment Agreement concerns an option to purchase incentive units which, 

if vested, AffiniPay could repurchase “in accordance with the terms of the [2016] 

Option Plan and [A]ward [A]greement.”106 There is no provision for valuation of 

incentive units in the Employment Agreement. Even if there was, the units at issue 

in the Valuation Claim were—according to West’s arbitration claim—“new options 

(issued at the TA transaction).”107

Based on West’s description of those units, the Valuation Claim concerns the 

New Options issued post-rollover. In that case, the dispute resolution of the 2016 

Option Plan—not the Employment Agreement—would be relevant. AffiniPay 

would establish reasonable probability of success on the merits of its claim that the 

Valuation Claim is improperly in the Arbitration for the reasons discussed above. 

AffiniPay contends that the Profit Interest Agreement and the 2020 Option 

Plan are, instead, the proper agreements that must be considered to resolve the 

Valuation Claim.108 That is so, AffiniPay argues, because the Valuation Claim 

106 Compl. Ex. B § 3(D), Ex. D § 9.

107 Compl. Ex. A ¶ 21. 

108 Pls.’ Opening Br. at 22-23.
26

concerns a dispute about whether AffiniPay ascribed “fair value” to the incentive 

units awarded in July 2020 that it sought to repurchase upon West’s termination.109 

AffiniPay granted West those incentive units “subject to the terms and conditions 

set forth” in the Profit Interest Agreement and the 2020 Option Plan.110 The 2020 

Option Plan affords AffiniPay the right to repurchase West’s vested incentive units 

upon his termination at their “Fair Market Value.”

111

 “Fair Market Value” is a term 

defined in the 2020 Option Plan as being, in relevant part, “based on the reasonable 

application of a reasonable valuation method not inconsistent with Section 409A of 

the [Tax] Code, including a valuation conducted by an independent valuation 

firm.”112

West’s Valuation Claim could be read to address those provisions of the 2020 

Option Plan. West’s Summary of Claim in the Arbitration alleges that “AffiniPay 

would prefer to set the fair value at the January 2011 409A valuation of 1.91 per 

share or $751M total.”113 He further alleges that a valuation by Lazard “placing the 

value at ~$1.4B” is more accurate.114 

109 Compl. ¶¶ 22, 24-26, Ex. A ¶¶ 21, 38.

110 Compl. Ex. E (Preamble).

111 Compl. Ex. F § 9.

112 Id. § 1. 

113 Compl. Ex. A ¶ 21.

114 Id.
27

There is also a definition of “Fair Market Value” in the 2016 Option Plan

providing that the determination of value “shall be made in good faith by [AffiniPay] 

in compliance with Section 409A.”115 I cannot conclude at this phase that the 2016 

Option Plan is irrelevant to the Valuation Claim. Perhaps provisions in both the 

2016 Option Plan and 2020 Option Plan apply. Regardless, it is reasonably likely 

that the Profit Interest Agreement, rather than the Employment Agreement, governs 

at least some of the incentive units at issue in the Arbitration.

116

 The Profit Interest 

Agreement, which is governed by Delaware law, provides that those units were 

granted to West “subject to the terms and conditions” in the Profit Interest 

Agreement, the 2020 Option Plan, and AffiniPay’s LLC Agreement.

117 The Profit

Interest Agreement contains an arbitration clause requiring “that any dispute or 

controversy arising out of, relating to, or in connection with” that agreement or the 

transactions it contemplates must be arbitrated under the DRAA.118

115 Compl. Ex. D § 2. 

116 Even if only the 2016 Option Plan was relevant, the Employment Agreement would not 

be at issue in the Valuation Claim. 

117 Compl. Ex. E at 1; id. § 5(e) (“This Agreement shall be governed by and construed in 

accordance with the Delaware Limited Liability Company Act as to matters within the 

scope thereof, and as to all other matters shall be governed and construed in accordance 

with the internal laws of the State of Delaware . . . .”); Konstanzer Decl. Ex. 1 (2015 

AffiniPay Holdings LLC Agreement) § 12.16 (applying Delaware law).

118 Compl. Ex. E § 5(j).
28

In short, I do not read the Valuation Claim to concern any of the rights and 

obligations provided for in the Employment Agreement. Under the court’s 

reasoning in Parfi Hldg. AB v. Mirror Image Internet, Inc., if a claim does not 

address any of the rights and obligations provided for in an underlying agreement, 

then the claim is beyond the reach of the underlying agreement’s arbitration 

clause.119 The Valuation Claim therefore may be beyond the scope of the 

Employment Agreement’s arbitration clause.

The subject matter of the Valuation Claim suggests that the 2016 Option 

Plan’s arbitration clause, and possibly the Profit Interest Agreement’s dispute 

resolution provision, will control. I need not make that ultimate determination at the 

present stage. The relevant issue for AffiniPay’s preliminary injunction motion is 

whether AffiniPay is reasonably likely to prevail in demonstrating that the pending 

Arbitration is an inappropriate forum to arbitrate the Vesting and Valuation Claims. 

AffiniPay has made that showing.

119 817 A.2d 149, 156 (Del. 2002); see also Chandler v. Ciccoricco, 2003 WL 21040185, 

at *15 n.65 (Del. Ch. May 5, 2003) (denying the enforcement of an arbitration provision 

because the claims did not arise out of the underlying agreement); Seven Hills Com., LLC 

v. Mirabal Custom Homes, Inc., 442 S.W.3d 706 (Tex. App. 2014) (holding that courts 

will not enforce an agreement’s arbitration provisions unless the claims arise out of or 

relate to the underlying agreement).
29

2. Threat of Irreparable Injury

AffiniPay has also demonstrated that it faces irreparable harm if the Vesting 

Claim and Valuation Claim go forward in the pending Arbitration. “Delaware courts 

have consistently found that threatened, wrongful enforcement of an arbitration 

clause constitutes sufficient irreparable harm to justify an injunction.”120 West 

asserts that AffiniPay faces no risk of harm because it agreed to arbitrate before the 

AAA pursuant to the Employment Arbitration Rules.121 But if AffiniPay’s 

interpretation of the relevant contracts is correct, the Arbitration would effectively 

strip it of the dispute resolution procedures it bargained for in the 2016 Option Plan 

and Profit Interest Award. To force AffiniPay to proceed with the Arbitration, 

pursuant to the Employment Arbitration Rules, “involves a quantum of irreparable 

harm that outweighs the risk of improvidently granting a preliminary injunction.”122

3. Balance of the Equities

The balance of the equities also favors the issuance of an injunction barring 

West from pursuing the Vesting Claim and Valuation Claim in the Arbitration. If 

the court does not grant an injunction, AffiniPay may be subjected to arbitral rules 

in an arbitral forum that it never agreed to. West argues that if injunctive relief is 

granted, he will be “deprived of the mutual covenants that both parties made when 

120 Brown v. T-Ink, LLC, 2007 WL 4302594, at *16 (Del. Ch. Dec. 4, 2007).

121 Def.’s Opp. Br. at 44-45. 

122 Angus v. Ajio, LLC, 2016 WL 2894246, at *1 (Del. Ch. May 13, 2016). 
30

entering into the Employment Agreement.”123 If AffiniPay’s arguments ultimately 

bear out, however, the parties’ agreements will be honored. Moreover, West will 

not be prevented from pursuing his equity-based claims against AffiniPay. He 

simply would be required to pursue them in the forum and subject to the rules the 

parties contracted for. Neither party would be forced to arbitrate under procedures 

inconsistent with the parties’ arbitration agreements.

4. Bond

Under Court of Chancery Rule 65(c), the court must impose a bond when 

granting a preliminary injunction.

124

 The bond is to be “in such sum as the Court 

deems proper, for the payment of such costs and damages as may be incurred or 

suffered by any party who is found to have been wrongfully enjoined or 

restrained.”125 

Only AffiniPay makes any argument about the appropriate amount of a bond, 

contending that a nominal bond of $1.00 should be imposed.126 West has no 

response. Because West does not appear to face cognizable harm from the issuance 

of a limited preliminary injunction and has not set forth any argument that would 

123 Def.’s Opp. Br. at 46. 

124 Ct. Ch. R. 65(c). 

125 Id.

126 Pls.’ Opening Br. at note 6. 
31

support the imposition of a significant bond, I conclude that a nominal bond of 

$1,000 is appropriate.127 

III. CONCLUSION

For the reasons described above, West’s motion to dismiss for lack of subject 

matter jurisdiction is denied. Because AffiniPay has shown a reasonable probability 

of success on the merits, a sufficient threat of irreparable injury, and that the balance 

of the equities favors the issuance of an injunction, AffiniPay’s motion for 

preliminary injunction is granted. West is preliminarily enjoined from pursuing in 

the Arbitration claims relating to the vesting schedule applicable to his AffiniPay 

options or the fair value of his incentive units, including the Vesting Claim and 

Valuation Claim. 

127 In Rodgers v. Bingham, the court set a “nominal bond” of $1,000 where the defendant 

“did not set forth any facts of record or any realistic theory” to support a significant bond. 

C.A. No. 2017-0314-AGB, at 96 (Del. Ch. June 1, 2017) (TRANSCRIPT). In Angus v. 

Ajio, LLC, the parties agreed to a bond in the amount of $1,000 where the court preliminary 

enjoined an arbitration. C.A. No. 11895–VCG (Del. Ch. April 4, 2016) (Dkt. 44).