Court Opinion

ID: 9889244
Source: CourtListenerOpinion
Date Created: 2023-10-07 00:00:32.017685+00
Date Added: 2024-06-11T07:50:01.941515
License: Public Domain

Case: 23-50038        Document: 00516923816             Page: 1      Date Filed: 10/06/2023

             United States Court of Appeals
                  for the Fifth Circuit                                  United States Court of Appeals
                                                                                  Fifth Circuit

                                     ____________                               FILED
                                                                          October 6, 2023
                                      No. 23-50038
                                                                           Lyle W. Cayce
                                     ____________                               Clerk

   Daniel Flores, on Behalf of Himself and on Behalf of All Others Similarly
   Situated,

                                                                      Plaintiff—Appellee,

                                            versus

   BJ’s Restaurant Operations Company; BJ’s Restaurants,
   Incorporated,

                                             Defendants—Appellants.
                     ______________________________

                     Appeal from the United States District Court
                          for the Western District of Texas
                               USDC No. 1:21-CV-1185
                     ______________________________

   Before Clement, Haynes, and Oldham, Circuit Judges.
   Per Curiam:*
         The question presented is whether Daniel Flores and BJ’s
   Restaurants, his former employer, formed a valid agreement to arbitrate
   under Texas Law. The district court said no. We REVERSE.

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-50038      Document: 00516923816          Page: 2    Date Filed: 10/06/2023

                                    No. 23-50038

                                          I.
          Flores worked at BJ’s. As part of his on-boarding process, Flores
   signed an agreement to submit any work-related disputes to binding
   arbitration. That agreement requires individual arbitration and forbids
   collective action. Nevertheless, he brought a class action suit against the
   company in federal court alleging that BJ’s violated the Fair Labor Standards
   Act.
          BJ’s moved to compel arbitration. The district court, adopting the
   reasoning of the magistrate judge’s report and recommendation in full, found
   that there was no enforceable arbitration agreement between Flores and BJ’s
   because the company failed to sign the agreement. BJ’s timely appealed. See
   9 U.S.C. § 16(a)(1).
                                         II.
                                         A.
          Under the Federal Arbitration Act, a party is entitled to enforcement
   of an arbitration agreement where (1) there is a valid agreement to arbitrate
   and (2) the dispute falls within the scope of that agreement. Huckaba v. Ref-
   Chem, LP, 892 F.3d 686, 688 (5th Cir. 2018) (citing Klein v. Nabors Drilling
   USA LP, 710 F.3d 234, 236 (5th Cir. 2013)). In this case, only the first
   element is at issue.
          Determining if there is a valid agreement to arbitrate is a question of
   law, which we review de novo. Id. We answer that question by looking to the
   validity of the contract under state law. Id. (citing Kubala v. Supreme Prod.
   Servs., Inc., 830 F.3d 199, 202 (5th Cir. 2016)).
          This contract is governed by Texas law, which requires: “(1) an offer,
   (2) an acceptance, (3) a meeting of the minds, (4) each party’s consent to the
   terms, and (5) execution and delivery of the contract with the intent that it be

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Case: 23-50038        Document: 00516923816         Page: 3   Date Filed: 10/06/2023

                                    No. 23-50038

   mutual and binding.” See Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d
   631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). This case
   hinges on the final element, asking whether there was a validly executed
   contract in the absence of BJ’s signature.
          Under Texas law, “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.” Firstlight Fed. Credit Union v. Loya, 478 S.W.3d 157, 170 (Tex.
   App.—El Paso 2015, no pet.). And the absence of a signature by a party will
   “not necessarily destroy” an agreement. Wright v. Hernandez, 469 S.W.3d
   744, 757 (Tex. App.—El Paso 2015, no pet.); see also In re Polymerica, LLC,
   296 S.W.3d 74, 76 (Tex. 2009) (orig. proceedings) (per curiam) (noting that
   Texas law does not require that an “employer must sign [an] arbitration
   agreement before it may insist on arbitrating a dispute with its employee”).
                                         B.
          Here, it is clear that Texas law did not require BJ’s signature to form
   an enforceable arbitration agreement. Perhaps most importantly, there is no
   place for BJ’s to sign the agreement. It contains no signature block at the end
   of the agreement for the company. Cf. In re Bunzl USA, Inc., 155 S.W.3d 202,
   211 (Tex. App.—El Paso 2004, orig. proceeding) (finding that a signature
   was required when the contract had a signature block intended for the
   employer); Hi Tech Luxury Imps., LLC v. Morgan, No. 03-19-00021-CV, 2019
   WL 1908171, at *2 (Tex. App.—Austin Apr. 30, 2019, no pet.) (mem. op.)
   (same). And Flores has pointed to no Texas case in which a court has
   invalidated an agreement for lack of signature when there was no empty
   signature block.

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                                          No. 23-50038

           Even if the contract was ambiguous on this point,† Texas law would
   require us to consider the parties’ conduct. See DISH Network LLC v.
   Alexander, No. 13-20-00240-CV, 2021 WL 3085763, at *7 (Tex. App.—
   Corpus Christi July 22, 2021, pet. denied), reh’g denied (Aug. 30, 2021). The
   actions here decisively favor BJ’s. The employer prepared Flores’s
   arbitration agreement on its letterhead, as it does for every employee. BJ’s
   presented the agreement to Flores for signature, as part of his onboarding
   process, and required that he complete it before starting employment. The
   company kept the agreement in his personnel file, and then sought to enforce
   it against him upon the filing of this suit. Texas courts have found that these
   considerations evince an employers’ intent to be bound even when they did
   not sign arbitration agreements. Id. at *6–7; Wright, 469 S.W.3d at 761
   (similar).
           Flores says otherwise. He argues the plain language references to
   “signing” show that BJ’s signature was a condition precedent for contract
   execution. Red Br. 13. But such a reading is possible only by looking at those
   clauses in isolation. And Texas law commands looking to the instrument as a
   whole, harmonizing all the clauses. J.M. Davidson, Inc. v. Webster, 128
   S.W.3d 223, 229 (Tex. 2003). When viewing the complete instrument, the
   three scattered mentions of “signing,” ROA.144–46, are not enough to
   “clearly and explicitly require a signature.” Firstlight, 478 S.W.3d at 170.
           Flores also believes that under BJ’s reading, the contract would fail
   for lack of consideration. But this position misunderstands the nature of the
           _____________________
           †
              Flores points out, for example, that three peripheral clauses mention BJ’s signing
   the agreement. The core of the agreement, however, deals with binding arbitration, waiving
   the right to collective action, and detailing—at length—the arbitration procedures that the
   parties agree to use with no reference to a signature requirement at all. So we find the
   contract unambiguous. But as explained in the body text, it would not matter if the
   agreement’s three signature references created ambiguity on this point.

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                                   No. 23-50038

   arbitration agreement. The agreement here is supported by the consideration
   of new employment. Even though Flores’s employment was at-will, that is
   not illusory because the agreement survives the employment relationship. It
   provides an avenue to address, for example, claims of wrongful termination.
   Accordingly, the Texas Supreme Court has repeatedly blessed such
   agreements. See In re Whataburger Rests. LLC, 645 S.W.3d 188, 197–98 (Tex.
   2022), reh’g denied (June 17, 2022).
          REVERSED.

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