Meyer v. WMCO-GP, 211 S.W.3d 302 (Tex. 2006)

Meyer v. WMCO-GP, No. 04-0252 (Tex. Dec. 22, 2006)(Hecht)(arbitration with nonparties) Alton J. Meyer, Meyer Acquisition Corp., and Ford Motor Company, Petitioners, v. WMCO-GP, LLC and Bullock Motor Company, Respondents ═══════════════════════════════ On Petition for Review from the Court of Appeals for the Ninth District of Texas ═══════════════════════════════ Justice Hecht delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Wainwright, Justice Brister, Justice Medina, Justice Green, Justice Johnson, and Justice Willett joined. Justice O’Neill filed a dissenting opinion. A person who has agreed to arbitrate disputes with one party may in some cases be required to arbitrate related disputes with others.[1] This is such a case. A motor vehicle manufacturer exercised its right of first refusal to acquire its dealer’s business and transferred the right to its assignee, preempting the dealer’s agreement to sell the business to another. The jilted buyer sued the manufacturer and its assignee for interfering with the proposed contract of sale. Although the defendants had no contract with the jilted buyer, they demanded arbitration based on the buyer’s agreement to arbitrate disputes with the dealer. The trial court refused to compel arbitration, and a divided court of appeals affirmed.[2] We reverse. Ford Motor Co.’s agreement with its dealer, Bullock Motor Co., gave Ford an assignable right of first refusal to acquire Bullock’s business should Bullock want to sell to another. The dealership agreement provided that Ford could “discuss the terms of [any proposed sale] with any potential Assignee, as long as such information is treated confidentially.” Bullock contracted to sell the dealership to WMCO-GP, LLC. Their purchase and sale agreement (“PSA”) acknowledged Ford’s right of first refusal and, if Ford exercised that right, allowed Bullock to terminate the agreement. Ford exercised its right and assigned it to Alton J. Meyer and Meyer Acquisition Corp. (collectively “Meyer”), and Bullock accordingly sold its business to Meyer. WMCO sued Bullock, Meyer, and Ford. WMCO sought a declaration that Ford’s right of first refusal was void because, in violation of the dealership agreement, assignee Meyer had disclosed WMCO’s confidential information to third parties. WMCO also claimed damages against Meyer for tortious interference with the PSA and against Meyer and Ford for conspiring to violate the Texas Motor Vehicle Commission Code.[3] WMCO asserted that although Bullock had breached the PSA, it was joined only as a necessary party because it would have performed the PSA but for Ford’s exercise of its right of first refusal. Meyer and Ford moved to compel arbitration based on WMCO’s agreement to the following provision in the PSA, to which they, of course, were not parties themselves: Any controversy between the parties to this Agreement involving the construction or application of any of the terms, covenants, or conditions of this Agreement, shall . . . be submitted to binding arbitration, and such arbitration shall comply with and be governed by the provisions of the Texas General Arbitration Act . . . . Meyer and Ford argued that because WMCO had made this agreement with Bullock, WMCO was equitably estopped from refusing to arbitrate with them. Bullock did not join in the motions. Although the dealership agreement between Bullock and Ford also provided for arbitration and was raised in the trial court, Meyer and Ford conceded, for purposes of this appeal, that the dealership agreement would not apply to WMCO.[4] Nor do they rely on the Federal Arbitration Act;[5] they assert only the Texas General Arbitration Act.[6] The trial court denied the motion, and a divided court of appeals affirmed.[7] We granted Meyer’s and Ford’s petitions for review.[8] As a rule, arbitration of a claim cannot be compelled unless it falls within the scope of a valid arbitration agreement.[9] But sometimes a person who is not a party to the agreement can compel arbitration with one who is,[10] and vice versa.[11] We have held that a person who seeks by his claim “to derive a direct benefit from the contract containing the arbitration provision” may be equitably estopped from refusing arbitration.[12] The court of appeals came to this same conclusion based largely on Grigson v. Creative Artists Agency, L.L.C., in which the United States Court of Appeals for the Fifth Circuit quoted the Eleventh Circuit’s decision in MS Dealer Service Corp. v. Franklin, stating: Existing case law demonstrates that equitable estoppel allows a nonsignatory to compel arbitration in two different circumstances. First, equitable estoppel applies when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against the nonsignatory. When each of a signatory’s claims against a nonsignatory makes reference to or presumes the existence of the written agreement, the signatory’s claims arise out of and relate directly to the written agreement, and arbitration is appropriate. Second, application of equitable estoppel is warranted when the signatory to the contract containing an arbitration clause raises allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract. Otherwise the arbitration proceedings between the two signatories would be rendered meaningless and the federal policy in favor of arbitration effectively thwarted.[13] Grigson, like the present case, was a suit by a signatory to an arbitration agreement against a non-signatory.[14] In essence, the Fifth Circuit explained, the claimant cannot “have it both ways”: it cannot, on the one hand, seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on the other hand, deny arbitration’s applicability because the defendant is a non-signatory.[15] Having derived from Grigson a substantially correct statement of Texas law, the court of appeals misapplied it to this case. First, the court concluded that WMCO could not be required to arbitrate claims other than those described in the arbitration provision of the PSA — “controvers[ies] between the parties to this Agreement involving the construction or application of any of the terms, covenants, or conditions of this Agreement”.[16] WMCO’s claims were against non-parties Meyer and Ford and did not, the court determined, involve the construction or application of the PSA.[17] Had the PSA broadly required arbitration of “all disputes” in just so many words instead of describing particular claims and parties, the court reasoned, equitable estoppel would apply.[18] We agree that an arbitration provision may limit the application of equitable estoppel. For example, if Bullock and WMCO, the parties to the PSA, had agreed to arbitrate only very specific disputes that might arise between the two of them — whether specific vehicles were included in inventory, for example — and nothing else, one could hardly argue that WMCO would be equitably estopped from drawing the same line for disputes with non-parties. Equitable estoppel cannot give non-parties a greater right to arbitration than the parties themselves have. But the text of the arbitration provision here is not so restrictive. The phrase “between the parties,” without more, suggests only that Bullock and WMCO meant to ensure that the agreement applied to disputes between them, not that they intended to preclude the application of equitable estoppel. A similar provision in MS Dealer, expressly naming the car seller and buyer, did not prevent that court from applying equitable estoppel to compel arbitration of tort claims against a non-signatory service corporation.[19] And while “all disputes” might be broader than disputes “involving the construction or application of any of the terms, covenants, or conditions” of the PSA, the latter category easily includes WMCO’s claims, which all construe or apply the condition of the PSA that Bullock could terminate if Ford exercised its right of first refusal. The arbitration provision does not exclude WMCO’s claims. The court of appeals gave a second reason for not applying equitable estoppel: WMCO’s claims against Meyer and Ford did not rely on the terms of the PSA but merely “touch[ed] upon” or “related to” it.[20] But this does not defeat the application of equitable estoppel. WMCO’s claim against Bullock for breach of the PSA relies squarely on the PSA. WMCO’s other claims against Meyer and Ford also all depend on the existence of the PSA. If Bullock properly terminated the PSA, based on Ford’s exercise of its right of first refusal, then there would be no claim for tortious interference, no need to decide whether Ford validly exercised the right of first refusal, and no need to decide whether Meyer and Ford conspired to violate statutes protecting dealers from certain actions by manufacturers. WMCO concedes that if the PSA was preempted by Ford’s exercise of its right of first refusal, then WMCO has no rights against Meyer and Ford for the court to declare, there was no contract to interfere with, and Meyer and Ford could not have violated state law. WMCO further concedes that its damages cannot be calculated without reference to the PSA. When a party’s right to recover and its damages depend on the agreement containing the arbitration provision, the party is relying on the agreement for its claims.[21] Finally, the court concluded that WMCO’s claims against Meyer and Ford were not intertwined with claims against Bullock.[22] This is simply wrong. WMCO’s claims against Meyer and Ford are not only intertwined with its claims against Bullock, they have the same tap root: WMCO’s assertion that Ford lost its right of first refusal. If WMCO is correct in this assertion it is clearly entitled to the declaration it seeks. Moreover, only if WMCO is correct could Bullock have improperly terminated the PSA and breached it; and thus only if WMCO is correct could the PSA still remain in effect, despite Bullock’s termination of it, such that Meyer could have tortiously interfered with it or WMCO have any basis for its state law claims. WMCO stresses that it has made Bullock a nominal party only and that Bullock is willing to sell to whoever is entitled to buy. But the interdependence of WMCO’s claims against Bullock, Meyer, and Ford is not removed by Bullock’s complacency. WMCO is trying to have it both ways: it is asserting rights that it would not have but for the PSA, but refusing to honor its agreement to arbitrate disputes over those rights.[23] WMCO also argues that the trial court had discretion not to apply equitable estoppel, even if it could be applied in the same circumstances. We disagree. “A trial court has no ‘discretion’ in determining what the law is or applying the law to the facts.”[24] The trial court should have granted Meyer’s and Ford’s motions to compel arbitration. Accordingly, we reverse the judgment of the court of appeals and remand the case to the trial court for further proceedings consistent with this opinion. Nathan L. Hecht Justice Opinion delivered: December 22, 2006 ---------- Opinion below: Meyer v. WMCO GP, LLC., 126 S.W.3rd 313 (Tex. App. Beaumont 2004) ---------- [1] In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 762 (Tex. 2006) (per curiam) (holding that a party to an arbitration agreement must arbitrate tortious interference claims against the other party’s agents and affiliates). [2] 126 S.W.3d 313, 320 (Tex. App.—Beaumont 2004). [3] Specifically, WMCO alleged that Meyer and Ford had conspired to violate what was then Tex. Rev. Civ. Stat. Ann. art. 4413(36), § 5.02(b)(8), now codified as Tex. Occ. Code § 2301.458, which makes it unlawful for a motor vehicle manufacturer to fail to give effect to or attempt to prevent the sale or transfer of a dealer, dealership or franchise except in certain circumstances, and art. 4413(36), § 5.02(b)(3), (5), now codified as Tex. Occ. Code § 2301.453, .455, which makes it unlawful, notwithstanding the terms of any franchise agreement, for a manufacturer to terminate a franchise unless certain statutory requirements are met. [4] 126 S.W.3d at 319. [5] See 9 U.S.C. §§ 1-16. [6] See Tex. Civ. Prac. & Rem. Code §§ 171.001-.098. [7] 126 S.W.3d at 315, 320 (McKeithen, C.J.; Gaultney, J., dissenting); see Tex. Civ. Prac. & Rem. Code § 171.098(a)(1) (“A party may appeal a judgment or decree entered under this chapter or an order . . . denying an application to compel arbitration . . . .”). [8] 48 Tex. Sup. Ct. J. 384 (Feb 11, 2005). Because there was a dissent in the court of appeals, we have jurisdiction over this interlocutory appeal. See Tex. Gov’t Code § 22.225(b)(3) (disallowing a petition for review in an interlocutory appeal), and (c) (except when, e.g., there was an appealable trial court judgment and “the justices of the courts of appeals disagree[d] on a question of law material to the decision”). [9] Tex. Civ. Prac. & Rem. Code § 171.021(a)(1) (“A court shall order the parties to arbitrate on application of a party showing . . . an agreement to arbitrate . . . .”); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003) (“A party attempting to compel arbitration must first establish that the dispute in question falls within the scope of a valid arbitration agreement.”) (citing In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (per curiam) (stating the same rule under the Federal Arbitration Act)). [10] In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 761-762 (Tex. 2006) (per curiam). [11] In re Weekley Homes, L.P., 180 S.W.3d 127, 131-135 (Tex. 2005); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 738 (Tex. 2005); In re FirstMerit Bank, N.A., 52 S.W.3d 749, 755-756 (Tex. 2001). [12] In re Vesta Ins. Group, 192 S.W.3d at 761-762; In re Kellogg Brown & Root, 166 S.W.3d at 741; see In re Weekley Homes, 180 S.W.3d at 131; In re FirstMerit, 52 S.W.3d at 755-756. [13] 210 F.3d 524, 527 (5th Cir.), cert. denied, 531 U.S. 1013 (2000) (quoting MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir. 1999) (internal citations and quotation marks omitted)) (added emphasis omitted), discussed at 126 S.W.3d at 316-318. [14] 210 F.3d at 526. [15] Id. at 528 (citing MS Dealer, 177 F.3d at 947). [16] 126 S.W.3d at 319. [17] Id. at 319-320. [18] See id. at 319. [19] MS Dealer, 177 F.3d at 944 (“[The] arbitration clause[] provid[es] that ‘buyer hereby acknowledges and agrees that all disputes and controversies of every kind and nature between buyer and Jim Burke Motors, Inc. arising out of or in connection with the purchase of this vehicle will be resolved by arbitration . . . .’”) (emphasis added). [20] 126 S.W.3d at 319. [21] See In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 762 (Tex. 2006) (per curiam) (holding that tortious interference claims by one signatory to an arbitration agreement against agents or affiliates of the other signatory arise more from the contract than general law and are thus subject to arbitration). [22] 126 S.W.3d at 320. [23] Cf. Grigson, 210 F.3d at 527-528 (stating that equitable estoppel is “much more readily applicable” when claims both directly rely on the agreement containing the arbitration provision and are also intertwined with claims against a party to the agreement). [24] Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992).

In re Olga Palacios, ___ S.W.3d ___ (Tex. 2006)

In re Olga Palacios, No. 05-0038, (Tex. Jun. 30, 2006)(per curiam)(arbitration mandamus) In re Olga Palacios, Relator ═══════════════════════ On Petition for Writ of Mandamus ═══════════════════════ PER CURIAM Olga Palacios filed suit against several individuals and companies when her attempt to buy a duplex in Austin fell through. One of those defendants, Mortgages Direct, moved to compel arbitration based on an agreement providing that all disputes relating to its agreement with Palacios “shall be submitted for binding arbitration.” The trial court granted the motion, and the Third Court of Appeals denied mandamus relief. We too deny relief, but write to recognize a change in accordance with developments in federal law. At the hearing on the motion to compel arbitration, Mortgages Direct offered the arbitration contract purportedly signed by Palacios. The latter’s attorney objected to the document’s authenticity, but withdrew the objection when the trial court offered to postpone the hearing until it could be proved up. Palacios then took the stand and testified through an interpreter that the signature on the agreement was not hers. Apparently unconvinced, the trial court granted the motion and abated the underlying case until arbitration was concluded. The arbitration agreement does not indicate whether it is governed by the Federal or Texas Arbitration Act, and neither do the parties. But as Palacios pleaded that she gave her realtor a power of attorney to purchase the duplex while she was in Mexico, the transaction appears to involve foreign commerce, and thus implicates the FAA. See 9 U.S.C. §§ 1, 2 (declaring contracts “evidencing a transaction involving commerce” enforceable, and defining “commerce” as “commerce among the several States or with foreign nations”) (emphasis added). We have held recently and repeatedly that an order denying arbitration under the FAA is reviewable by mandamus. See, e.g., In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005); In re Nexion Health at Humble, Inc., 173 S.W.3d 67, 69-70 (Tex. 2005). But we have not addressed recently or repeatedly whether an order granting arbitration under the FAA can be reviewed by mandamus. In 1994, we held that it could. See Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994) (per curiam). But since then, the United States Supreme Court has held that the FAA allows review of such orders only if the underlying case is dismissed; if it is merely stayed (as was the case here), there can be no review until final judgment. See Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 87 n.2 (2000). Of course, Texas courts applying the FAA follow Texas rather than federal procedure. See Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992). Nevertheless, “it is important for federal and state law to be as consistent as possible in this area, because federal and state courts have concurrent jurisdiction to enforce the FAA.” In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005). There is little friction between the FAA and Texas procedures when state courts review by mandamus an order that the federal courts would review by interlocutory appeal. See Anglin, 842 S.W.2d at 272-73. But it is quite another matter for state courts to review by mandamus an order that the federal courts could not review at all. Such review would create tension with the legislative intent of the FAA, which “generally permits immediate appeal of orders hostile to arbitration,” but “bars appeal of interlocutory orders favorable to arbitration.” Green Tree, 531 U.S. at 86. We need not decide today whether mandamus review of an order staying a case for arbitration is entirely precluded. Even after Green Tree, the Fifth Circuit has held that federal mandamus review of an order staying a case for arbitration may still be available if a party can meet a “particularly heavy” mandamus burden to show “clearly and indisputably that the district court did not have the discretion to stay the proceedings pending arbitration.” Apache Bohai Corp., LDC v. Texaco China, B.V., 330 F.3d 307, 310-11 (5th Cir. 2003). Palacios has not met such a burden here. While she denied signing the arbitration agreement, she admitted signing several papers she could not read because they were in English. She submitted no other exemplars of her signature for the court to review. Thus, her testimony presented a credibility issue, which she has not shown the trial judge indisputably got wrong. We recognize there is some one-sidedness in reviewing only orders that deny arbitration, but not orders that compel it. Yet both the Federal and Texas acts leave little uncertainty that this is precisely what the respective legislatures intended. See 9 U.S.C. § 16; Tex. Civ. Prac. & Rem. Code § 171.098. Accordingly, we deny the petition for mandamus. OPINION DELIVERED: June 30, 2006

In re D. Wilson Constr. Co., 196 S.W.3d 774 (Tex. 2006)

In re D. Wilson Construction Co., No. 05-0326, Jun. 30, 2006)(Willett)(arbitration mandamus, construction contracts, interlocutory appeal, ILA) In re D. Wilson Construction Company, et al., Relators ══════════════════════ On Petition for Writ of Mandamus ══════════════════════ consolidated with American Standard and the Trane Company, et al. v. Brownsville Independent School District, No. 05-0327 (Tex. Jun. 30, 2006)(Willett) (On Petition for Review from the Court of Appeals for the Thirteenth District of Texas) Justice Willett delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Hecht, Justice O’Neill, Justice Wainwright, Justice Medina, Justice Green, and Justice Johnson joined. Justice Brister filed a concurring opinion. In this consolidated proceeding, we decide whether the court of appeals had jurisdiction over an interlocutory appeal under the Texas Arbitration Act and whether the parties’ arbitration agreements are ambiguous. We hold that the court of appeals had jurisdiction over the interlocutory appeal and that the agreements are not ambiguous. I. Background In 1993, the Brownsville Independent School District contracted with two general contractors, D. Wilson Construction Company and Stotler Construction Company, to build two schools in Brownsville. Both contracts incorporate General Conditions and Supplementary Conditions. The General Conditions expressly incorporate AIA Document A201, a standard construction industry document published by the American Institute of Architects that details the parties’ respective rights, responsibilities and relationships on the project.[1] Paragraph 4.5 of A201 is titled “Arbitration,” and subparagraph 4.5.1, titled “Controversies and Claims Subject to Arbitration,” sets forth the broad, catch-all scope of the arbitration agreement: “Any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association . . . .” The Supplementary Conditions state that they “modify, change, delete from or add to” the General Conditions. Among other things, the Supplementary Conditions “[a]dd new Clause 4.5.1.1” to the arbitration provision: “Except as otherwise provided in this Contract, any dispute concerning a question of fact arising under this contract, which is not disposed of by agreement shall be decided by [BISD] . . . . The decision of [BISD] shall be final and conclusive unless” it is timely appealed to the Superintendent and then to the BISD Board of Trustees, “whose decision shall be final and conclusive.” This litigation began when one of the subcontractors, American Standard and the Trane Company (Trane), sought injunctive relief against BISD to preserve evidence in a personal injury action that students and teachers brought against Trane in another court. BISD counterclaimed for alleged defects in the construction of the two schools and filed third-party actions against several parties, including general contractors Wilson and Stotler, as well as subcontractors and second-tier subcontractors. Trane and the third-party defendants filed or joined motions to compel arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1–16, and the Texas Arbitration Act, Tex. Civ. Prac. & Rem. Code §§ 171.001–.098.[2] After a hearing, the trial court issued a brief letter ruling denying arbitration, saying “the Court finds the contract in question ambiguous.” Trane and the third-party defendants filed both a petition for writ of mandamus under the FAA and an interlocutory appeal under the TAA, and the court of appeals consolidated the two proceedings. __ S.W.3d __, __, Nos. 13-04-184-CV, 13-04-333-CV, 2005 WL 310777, at *1 (citing In re Valero Energy Corp., 968 S.W.2d 916, 916–17 (Tex. 1998)). The court of appeals dismissed the interlocutory appeal for want of jurisdiction, finding the TAA inapplicable since the dispute concerned a “‘transaction involving commerce.’“ Id. at __, 2005 WL 310777, at *2 (quoting In re MONY Sec. Corp., 83 S.W.3d 279, 282–83 (Tex. App.—Corpus Christi 2002, consolidated appeal and orig. proceeding). The court also denied the petition for writ of mandamus, holding that clause 4.5.1.1 in the Supplementary Conditions creates ambiguity. Id. at __, 2005 WL 310777, at *3. In this appeal, Trane and the third-party defendants complain that (1) the court of appeals erred in dismissing their interlocutory appeal under the TAA for want of jurisdiction, and (2) the trial court erred in deeming the arbitration agreements ambiguous and abused its discretion in denying their motions to compel arbitration. II. Jurisdiction of the Court of Appeals Trane and the third-party defendants first argue that the court of appeals erred in dismissing their TAA-based interlocutory appeal for want of jurisdiction. We agree.[3] The contracts in question reference neither the FAA nor TAA, merely noting that “[t]he Contracts shall be governed by the law of the place where the Project is located.” We have interpreted identical language to invoke federal and state law. In re L & L Kempwood Assocs., L.P., 9 S.W.3d 125, 127–28 (Tex. 1999) (per curiam) (consolidated appeal and orig. proceeding). Trane and the third-party defendants sought relief under both statutes in the court of appeals, bringing a petition for writ of mandamus under the FAA, see Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272–73 (Tex. 1992), and an interlocutory appeal under the TAA, Tex. Civ. Prac. & Rem. Code § 171.098(a)(1). While refusing jurisdiction under the TAA, the court of appeals recognized that it at least had jurisdiction under the FAA to consider the mandamus petition. __ S.W.3d at __, 2005 WL 310777, at *2. We held in Jack B. Anglin Co. that mandamus is appropriate to review a trial court’s denial of a motion to compel arbitration under the FAA. 842 S.W.2d at 272–73. The court of appeals determined that it lacked jurisdiction over the interlocutory appeal under the TAA because the construction contracts involved interstate commerce, thus implicating the FAA. __ S.W.3d at __, 2005 WL 310777, at *2; see Perry v. Thomas, 482 U.S. 483, 489 (1987) (the FAA applies when the dispute concerns a “contract evidencing interstate commerce”); 9 U.S.C. § 1 (“‘commerce’ . . . means commerce among the several States”); In re L & L Kempwood Assocs., L.P., 9 S.W.3d at 127 (noting that the FAA “extends to any contract affecting commerce, as far as the Commerce Clause of the United States Constitution will reach”). The court of appeals is not alone in dismissing interlocutory appeals under the TAA when the FAA applies. See Kroupa v. Casey, Nos. 01-05-00224-CV, 01-05-00376-CV, 2005 WL 3315279, at *4 (Tex. App.—Houston [1st Dist.] 2005, consolidated appeal and orig. proceeding) (not designated for publication); Am. Med. Tech., Inc. v. Miller, 149 S.W.3d 265, 269–70 (Tex. App.—Houston [14th Dist.] 2004, consolidated appeal and orig. proceeding); Verlander Family Ltd. P’ship v. Verlander, No. 08-02-00135-CV, 2003 WL 304098, at *3 (Tex. App.—El Paso 2003, no pet.); Pennzoil Co. v. Arnold Oil Co., 30 S.W.3d 494, 498 (Tex. App.—San Antonio 2000, consolidated appeal and orig. proceeding). Other courts have granted mandamus relief and dismissed the consolidated interlocutory appeal as moot. See, e.g., Kirby Highland Lakes Surgery Ctr., L.L.P. v. Kirby, 183 S.W.3d 891, 895 & n.5 (Tex. App.—Austin 2006, consolidated appeal and orig. proceeding); In re MacGregor (FIN) Oy, 126 S.W.3d 176, 181, 184 (Tex. App.—Houston [1st Dist.] 2003, consolidated appeal and orig. proceeding). We take this opportunity to clarify precisely when the FAA preempts the TAA. Many courts of appeals wrongly view the FAA and TAA as mutually exclusive, but the United States Supreme Court and this Court have held a different view for some time: the FAA only preempts contrary state law, not consonant state law. The United States Supreme Court has said: The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration. But even when Congress has not completely displaced state regulation in an area, state law may nonetheless be pre-empted to the extent that it actually conflicts with federal law—that is, to the extent that it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” The question before us, therefore, is whether application of [state law] to stay arbitration under this contract in interstate commerce . . . would undermine the goals and policies of the FAA. Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 477–78 (1989) (citations omitted) (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). Similarly, this Court has noted that the FAA “preempts state statutes to the extent they are inconsistent with that Act.” Jack B. Anglin Co., 842 S.W.2d at 271. Recently, in the case of In re Nexion Health at Humble, Inc., this Court articulated a four-factor test to determine whether the TAA would thwart the goals and policies of the FAA in a particular case. 173 S.W.3d 67, 69 (Tex. 2005) (per curiam) (construing 9 U.S.C. § 2). The FAA only preempts the TAA if: “(1) the agreement is in writing, (2) it involves interstate commerce, (3) it can withstand scrutiny under traditional contract defenses [under state law], and (4) state law affects the enforceability of the agreement.” Id. (emphasis added). In today’s case, the court of appeals ignored the fourth factor. The mere fact that a contract affects interstate commerce, thus triggering the FAA, does not preclude enforcement under the TAA as well. For the FAA to preempt the TAA, state law must refuse to enforce an arbitration agreement that the FAA would enforce, either because (1) the TAA has expressly exempted the agreement from coverage, see Tex. Civ. Prac. & Rem. Code § 171.002(a) (detailing various claims the TAA “does not apply to”), or (2) the TAA has imposed an enforceability requirement not found in the FAA, see In re Nexion Health at Humble, Inc., 173 S.W.3d at 69 (“The TAA interferes with the enforceability of the arbitration agreement by adding an additional requirement—the signature of a party’s counsel—to arbitration agreements in personal injury cases.”). The parties have asserted nothing in the TAA or other state law that would subvert enforcement of the agreements at issue. Therefore, the FAA does not preempt the TAA in this case, and the court of appeals had jurisdiction under both laws.[4] III. Ambiguity of the Arbitration Agreements Trane and the third-party defendants next argue that the trial court wrongly deemed the arbitration agreements ambiguous and abused its discretion in denying their motions to compel arbitration. We decide the merits under our mandamus jurisdiction.[5] Mandamus is proper to correct a clear abuse of discretion when there is no adequate remedy by appeal, Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding), as when a party is erroneously denied its contracted-for arbitration rights under the FAA, Jack B. Anglin Co., 842 S.W.2d at 272–73. Also, a trial court “has no ‘discretion’ in determining what the law is or applying the law to the facts.” Walker, 827 S.W.2d at 840. In evaluating a motion to compel arbitration, a court must determine first whether a valid arbitration agreement exists, and then whether the agreement encompasses the claims raised. In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (per curiam). When deciding whether the parties agreed to arbitrate under the FAA, courts should apply ordinary state law principles regarding the formation of contracts. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227–28 (Tex. 2003). In a letter ruling, the trial court found “the contract in question ambiguous”; however, the record does not indicate whether the trial court was uncertain as to the agreements’ existence or merely their scope. We address these two issues in turn. A. Ambiguity Concerning the Existence of Valid Agreements Whether a valid arbitration agreement exists is a legal question subject to de novo review. J.M. Davidson, Inc., 128 S.W.3d at 227. Whether contractual ambiguity exists is likewise a question of law. See Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). Inartful drafting does not alone render a contractual provision ambiguous. See Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951). A contract is ambiguous only if it is subject to “two or more reasonable interpretations after applying the pertinent rules of construction.” Columbia Gas Transmission Corp., 940 S.W.2d at 589. Ambiguity does not exist merely because the parties assert forceful and diametrically opposing interpretations. Id. BISD contends that the contracts with Wilson and Stotler (1) contain no arbitration language at all, or (2) contain ambiguous language. The trial court’s three-sentence letter ruling is silent on the first point, while the court of appeals, “[a]ssuming without determining that the contracts contain arbitration language,” concluded that “the supplementary conditions create ambiguity.” __ S.W.3d at __, 2005 WL 310777, at *3. We disagree with BISD that its contracts with Wilson and Stotler contained no arbitration language. The contracts validly and expressly incorporate by reference the expansive arbitration language of subparagraph 4.5.1 of A201. Innumerable contracts are consummated every day in Texas that incorporate other documents by reference. A contractual term is not rendered invalid merely because it exists in a document incorporated by reference, Owen v. Hendricks, 433 S.W.2d 164, 166 (Tex. 1968), and we agree with the courts of appeals that arbitration-related language is no exception to this rule. See, e.g., Teal Constr. Co./Hillside Villas Ltd. v. Darren Casey Interests, Inc., 46 S.W.3d 417, 420 (Tex. App.—Austin 2001, pet. denied) (holding that an unsigned arbitration agreement contained in a document incorporated by reference into the signed contract constitutes an enforceable arbitration agreement); D. Wilson Constr. Co. v. McAllen Indep. Sch. Dist., 848 S.W.2d 226, 230 (Tex. App.—Corpus Christi 1992, writ dism’d w.o.j.) (rejecting the argument that an arbitration agreement incorporated by reference is invalid or unenforceable). Accordingly, we reject BISD’s argument that these provisions were not validly incorporated into the contracts with Wilson and Stotler. We likewise reject BISD’s argument, and the trial court’s holding, that the arbitration agreements are ambiguous. Subparagraph 4.5.1 of A201 states: ”Any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association . . . .” The Supplementary Conditions “[a]dd new Clause 4.5.1.1” to the arbitration provision: ”Except as otherwise provided in this Contract, any dispute concerning a question of fact arising under this contract, which is not disposed of by agreement shall be decided by [BISD] . . . . The decision of [BISD] shall be final and conclusive unless” it is timely appealed to the Superintendent and then to the BISD Board of Trustees, “whose decision shall be final and conclusive.” The caption of clause 4.5.1.1 in the Supplementary Conditions evinces the parties’ intent to “[a]dd new Clause 4.5.1.1 to subparagraph 4.5.1.” Clause 4.5.1.1 is added to subparagraph 4.5.1, and the clause’s numerical designation places it beneath subparagraph 4.5.1. In addition, clause 4.5.1.1 begins with the caveat, “[e]xcept as otherwise provided in this Contract.” Subparagraph 4.5.1 does provide otherwise in certain cases. If the parties intended for clause 4.5.1.1 to supplant subparagraph 4.5.1, they could have easily drafted language to accomplish exactly that.[6] Further, clause 4.5.1.1 does not mention the additional arbitration procedures set forth in subparagraphs 4.5.2–4.5.7. If clause 4.5.1.1 negates subparagraph 4.5.1, as BISD contends, then subparagraphs 4.5.2–4.5.7 are meaningless. The placement, caption, and caveat of clause 4.5.1.1, as well as the language of subparagraphs 4.5.2–4.5.7, indicate that the clause is subordinate to subparagraph 4.5.1 if subparagraph 4.5.1 applies in a given situation. BISD argues that such a construction would render clause 4.5.1.1 meaningless. We disagree. By its terms, clause 4.5.1.1 applies to “any dispute concerning a question of fact arising under this contract,” while subparagraph 4.5.1 applies to “[a]ny controversy or Claim arising out of or relating to the Contract, or the breach thereof . . . .” (emphasis added). While the scope of clause 4.5.1.1 is narrower than the scope of subparagraph 4.5.1, certain situations would fall solely under the factual dispute clause. For example, the construction contracts could have called for solid brass doorknobs throughout the schools. BISD could have argued that the doorknobs Wilson and Stotler used were brass-plated instead of solid brass. Whether the doorknobs are solid brass or brass-plated would be a factual dispute subject to clause 4.5.1.1. We hold that the arbitration agreements and clause 4.5.1.1 can be reconciled; the arbitration agreements are not susceptible to more than one reasonable interpretation and are therefore not ambiguous. Columbia Gas Transmission Corp., 940 S.W.2d at 589. B. Ambiguity Concerning the Scope of the Agreements We next consider whether there is ambiguity concerning the agreements’ scope. The strong presumption favoring arbitration generally requires that we resolve doubts as to the scope of the agreements in favor of coverage. In re Kellogg, Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005); In re FirstMerit Bank, 52 S.W.3d 749, 753 (Tex. 2001); Cantella & Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (per curiam) (orig. proceeding). Once an agreement is established, “a court should not deny arbitration ‘unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation which would cover the dispute at issue.’” Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 899 (Tex. 1995) (per curiam) (orig. proceeding) (emphasis in original) (quoting Neal v. Hardee’s Food Sys., Inc., 918 F.2d 34, 37 (5th Cir. 1990)). Here, BISD claims there are construction defects throughout the two schools. This dispute is a “controversy or Claim arising out of or related to the Contract” to build the schools and thus falls squarely within the scope of the arbitration agreements. We find no ambiguity in either the validity or the scope of these arbitration agreements. Trane and the third-party defendants have proven the existence of valid arbitration agreements that cover the present dispute. In re Oakwood Mobile Homes, Inc., 987 S.W.2d at 573. The trial court abused its discretion by denying the motions to compel arbitration after finding “the contract in question ambiguous.” C. Waiver Finally, BISD argues that Trane and Stotler waived any right to arbitrate. In a personal injury suit filed by students and teachers in a separate court, Trane, Stotler, and Mac’s Insulation, Inc. filed cross-actions against BISD, seeking indemnity in that case. Trane also filed the present suit against BISD to obtain injunctive relief to preserve evidence in that personal injury case. There is a strong presumption against waiver under the FAA. In re Vesta Ins. Group, Inc., __ S.W.3d __, __, 2006 WL 662335, at *2 (Tex. 2006) (per curiam). “Merely taking part in litigation is not enough unless a party ‘has substantially invoked the judicial process to its opponent’s detriment.’” Id. (quoting In re Serv. Corp. Int’l, 85 S.W.3d 171, 174 (Tex. 2002)). In In re Vesta Ins. Group, Inc., we held that the relators, who litigated in the trial court for two years, did not substantially invoke the judicial process to their opponent’s detriment because the relators engaged in minimal discovery, and the real party in interest failed to demonstrate sufficient prejudice to overcome the strong presumption against waiver. Id. at __, 2006 WL 662335, at *3. Likewise, BISD has failed to demonstrate how the cross-actions for indemnity in the separate personal injury suit or Trane’s pursuit of injunctive relief related to that case have worked to BISD’s detriment. We hold that the actions of Trane, Stotler, and Mac’s Insulation, Inc. do not constitute waiver of their right to arbitrate. IV. Conclusion The trial court abused its discretion by finding the contracts ambiguous and denying the motions to compel arbitration. There is no ambiguity in either the existence or scope of these arbitration agreements. We conditionally grant the writ of mandamus and direct the trial court to (1) vacate its order denying the motions to compel arbitration, (2) grant Stotler’s motion to compel arbitration, (3) conduct further proceedings to determine whether Wilson is entitled to arbitration,[7] and (4) conduct further proceedings to determine whether the various nonsignatories are entitled to arbitration. The writ will issue only if the trial court fails to comply. Insofar as we have granted full relief under our mandamus jurisdiction, we dismiss the related interlocutory appeal as moot. _______________________________________ Don R. Willett Justice Opinion delivered: June 30, 2006 [1] Document Synopses by Series, at http://www.aia.org/docs_series. The American Institute of Architects represents the professional interests of America’s architects. The AIA: Advocacy Community, Knowledge, at http://www.aia.org/about_default. Among other things, the AIA publishes industry standard documents for design and construction projects. About AIA Contract Documents, at http://www.aia.org/docs_about&defPr’1. Document A201 “is frequently adopted by reference into a variety of other agreements . . . to establish a common basis for the primary and secondary relationships on the typical construction project.” Instruction Sheet for AIA Document A201, General Conditions of the Contract for Construction—1987 Edition at 1, available at http://www.engin.umich.edu/class/cee431/AIA/A201Inst.PDF. In the instant case, the General Conditions incorporate the 1987 (14th) Edition of AIA Document A201, which is approved and endorsed by the Associated General Contractors of America. AIA Document A201, General Conditions of the Contract for Construction (1987). [2] Four third-party defendants filed independent motions to compel arbitration: Wilson, Stotler, Mijares Mora Architects, Inc., and Zamora Engineering, Inc. Mac’s Insulation, Inc. joined Stotler’s motion. Trane, Victoria Air Conditioning, Ltd., and Superheat Air Balancing Co., Inc. joined the Wilson and Stotler motions. Al Cardenas Masonry Inc. joined Trane’s motion. Sechrist-Hall Co., Wrightway Construction, Inc., and Rio Mechanical, Inc. joined the Wilson and Trane motions. The independent motions of Mijares Mora Architects, Inc. and Zamora Engineering, Inc. do not invoke the FAA or TAA. Wilson’s motion is not in the record, and we are thus unable to determine whether it invokes the FAA, TAA, both, or neither. All other motions invoke the FAA or both the FAA and the TAA. The motions of all subcontractors and second-tier subcontractors also argue that the doctrine of equitable estoppel allows nonsignatories to the Wilson and Stotler contracts to obtain the benefits of the arbitration agreements therein. [3] This Court undeniably has jurisdiction to review the correctness of the court of appeals’ decision that it lacked jurisdiction over the TAA-based interlocutory appeal. See McAllen Med. Ctr., Inc. v. Cortez, 66 S.W.3d 227, 231 (Tex. 2001) (“When a court of appeals determines that it lacks jurisdiction over an interlocutory appeal, this Court has jurisdiction to review that decision.”). [4] While we continue to see no benefit in requiring parties to pursue parallel proceedings that are “unnecessarily expensive and cumbersome,” we remain mindful that “we may not enlarge appellate jurisdiction absent legislative mandate.” Jack B. Anglin Co., 842 S.W.2d at 272. We again invite the Legislature, “[i]n the interests of promoting the policy considerations of rigorous and expedited enforcement of arbitration agreements, . . . to consider amending the Texas Act to permit interlocutory appeals of orders issued pursuant to the Federal Act.” Id. [5] Our analysis today proceeds under the FAA because, as a procedural matter, Trane and the third-party defendants only assert in their “Statement of Jurisdiction” that this Court has jurisdiction under Cortez to decide whether the lower court had jurisdiction. 66 S.W.3d at 231 (“When a court of appeals determines that it lacks jurisdiction over an interlocutory appeal, this Court has jurisdiction to review that decision.”). They do not assert “conflict or dissent” jurisdiction under the general interlocutory appeal statute. Tex. Gov’t Code § 22.225(c). [6] A subparagraph later in the Supplementary Conditions states that it “[d]elete[s] the first sentence [of subparagraph 5.2.1 of the General Conditions] and substitute[s] the following . . . .” Clearly, the parties thus were free able to delete and replace language in the General Conditions with language in the Supplementary Conditions, ands they had done so elsewhere. [7] Wilson’s motion to compel arbitration is not in the record.

City of Houston v. Clark, 197 S.W.3d 314 (Tex. 2006)

The City of Houston vs. Donald Clark, No. 04-0930 (Tex. Jun. 16, 2006)(O'Neill) ═══════════════════════════════════ On Petition for Review from the Court of Appeals for the Fourteenth District of Texas ═══════════════════════════════════ Justice O’Neill delivered the opinion of the Court. In this case, we must decide whether Chapter 143 of the Local Government Code, known as the Fire Fighter and Police Officer Civil Service Act, authorizes municipalities to appeal adverse decisions of independent hearing examiners. We hold that it does. Accordingly, we reverse the court of appeals’ judgment of dismissal and remand the case to that court for consideration of the City of Houston’s appeal. I. Background Donald Clark, a senior fire alarm dispatcher for the Houston Fire Department, was suspended for fifteen days without pay for violating basic dispatch protocols. His error caused unnecessary delay in dispatching an emergency vehicle in response to the shooting of a Houston police officer. At the time Clark’s suspension was imposed, Houston Fire Chief Lester Tyra was himself serving a seven-day suspension because of an investigation into Clark’s placement at the emergency dispatch center. As a result, Clark’s suspension was handed down by the acting fire chief. Clark elected to appeal his suspension to an independent hearing examiner, as was his right under the Local Government Code. See Tex. Loc. Gov’t Code § 143.1016(a). At the parties’ request, the independent hearing examiner simultaneously considered the merits of Clark’s appeal and his motion to dismiss, which asserted that the Code only authorized the fire chief, not the acting fire chief, to suspend fire department personnel. The independent hearing examiner denied Clark’s appeal on the merits, finding that the fire department’s decision to suspend him was justified. But the examiner granted Clark’s motion to dismiss,[1] concluding that Section 143.117(a) of the Code empowered only the fire chief to temporarily suspend fire department personnel.[2] The City appealed the independent hearing examiner’s decision to the district court, asserting that the examiner had exceeded his jurisdiction and incorrectly applied the law in granting Clark’s motion to dismiss. It also sought a declaratory judgment that an acting fire chief may issue a temporary suspension under Chapter 143 of the Code. Clark filed a summary-judgment motion arguing that the district court’s decision in another case, City of Houston v. Rivera, No. 90-045333 (190th Dist. Ct., Harris County, Tex. Feb. 12, 1992), collaterally estopped the City from asserting that an acting fire chief has the authority to suspend a fire fighter. The City filed a cross-motion for summary judgment asserting seven grounds in support.[3] The trial court granted Clark’s summary-judgment motion and denied the City’s. The court of appeals, finding the factual differences between the circumstances of this case and Rivera sufficient to prevent collateral estoppel from barring the City’s claim, reversed the trial court’s judgment and remanded the case for further review. City of Houston v. Clark, No. 01-01-00828-CV, 2002 Tex. App. LEXIS 8854, at *9-10 (Tex. App. —Houston [1st Dist.] Dec. 12, 2002, no pet.). On remand, the trial court again granted summary judgment in Clark’s favor, this time noting that the reference to “department head” in Section 143.117(a) did not include an acting fire chief who was neither appointed by the Mayor nor confirmed by the City Council, and therefore, the acting fire chief was not empowered to suspend members of the fire department. The trial court’s order reversed Clark’s suspension and reinstated his wages and lost time. The City appealed the trial court’s decision, but the court of appeals dismissed the appeal for want of jurisdiction, holding that Section 143.1016(j) of the Code did not afford the City a right to appeal an independent hearing examiner’s decision. 142 S.W.2d at 353-54. The court of appeals concluded that the absence of an explicit reference to a municipality’s right to appeal a hearing examiner’s decision, contrasted with numerous references throughout Chapter 143 to the appellate rights of fire fighters and police officers, could only mean that “no such right or procedures were intended or exist.” 142 S.W.3d at 353; 354, n.3. The court of appeals expressly disagreed with other Texas appellate decisions holding that cities could appeal an adverse independent hearing examiner’s decision under Chapter 143. Compare id., with City of Garland v. Byrd, 97 S.W.3d 601, 607-08 (Tex. App.–Dallas 2002, pet. denied) (holding that there are no limitations on who may appeal a hearing examiner’s decision); Nuchia v. Woodruff, 956 S.W.2d 612, 616-18 (Tex. App.—Houston [14th Dist.] 1997, pet. denied) (holding that the city had a right to judicial review under the Declaratory Judgment Act to determine if a hearing examiner exceeded his authority, but not reaching whether there was a right to an appeal under Section 143.1016(j)); Nuchia v. Tippy, 973 S.W.2d 782, 786 (Tex. App.—Tyler 1998, no pet.) (holding that a municipality may appeal an independent hearing examiner’s decision to a trial court under Section 143.1016(j)); City of San Antonio v. Longoria, No. 04-04-00063-CV, 2004 WL 2098074 (Tex. App.—San Antonio Sept. 22, 2004, no pet.) (mem. op.) (reaching the merits of an appeal by the City of a hearing examiner’s decision); but see City of Waco v. Kelley, ___ S.W.3d ___, ___ (Tex. App.—Waco 2004) (holding that the City of Waco had no right to appeal an independent hearing examiner’s decision), rev’d, ___ S.W.3d ___ (Tex. 2006) (per curiam). We granted the City’s petition for review to resolve this split of authority over municipalities’ appellate rights under Section 143.1016(j) of the Local Government Code.[4] II. The Parties’ Arguments The City contends the court of appeals erred in foreclosing any recourse by cities to appeal an independent hearing examiner’s decision in district court. The City asserts that the decision leaves it without any remedy, even if the examiner’s decision is arbitrary or capricious, or if such a decision is procured unlawfully or by fraud. According to the City, construing the statutory scheme to foreclose any right of appeal would indicate an unconstitutional delegation of legislative authority. See, e.g., Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454, 472 (Tex. 1997) (designating eight factors to consider in determining whether a delegation of legislative power is constitutional, including whether a private examiner’s decision is subject to meaningful review); see also Proctor v. Andrews, 972 S.W.2d 729, 735 (Tex. 1998) (holding that the Legislature can delegate authority to private entities if there is protection against the arbitrary exercise of power). The City further claims the hearing examiner in this case exceeded his jurisdiction by, in effect, issuing a declaratory judgment that an acting fire chief must be appointed by the Mayor and confirmed by the City Council in order to suspend fire department personnel under Section 143.117 of the Code. Clark responds that the City has no right to appeal an independent hearing examiner’s decision under Section 143.1016(j). Clark notes that while cities might have recourse to district court to vindicate constitutional rights, the City raises no such rights in this case. Alternatively, Clark argues that, even if the City is determined to have a right to appeal under Section 143.1016(j), such an appeal is limited to the grounds that the arbitration panel was without jurisdiction or exceeded its jurisdiction or that the order was procured by fraud, collusion or other unlawful means. See Tex. Loc. Gov’t Code § 143.1016(j). Clark contends the City’s challenge to the examiner’s decision in this case implicates none of these narrow grounds. III. Discussion Section 143.1016 of the Local Government Code establishes procedures governing the review of certain disciplinary actions against fire fighters and police officers. See Tex. Loc. Gov’t Code § 143.1016. That provision affords an aggrieved officer the choice of appealing an adverse disciplinary action to an independent third party hearing examiner rather than to the Fire Fighters’ and Police Officers’ Civil Service Commission. Id. § 143.1016(a). In exchange, the aggrieved officer accepts a significantly circumscribed right to appeal the examiner’s decision, as described in Section 143.1016(c): The hearing examiner’s decision is final and binding on all parties. If the fire fighter or police officer decides to appeal to an independent third party hearing examiner, the person automatically waives all rights to appeal to a district court except as provided by subsection (j). Id. § 143.1016(c). Subsection (j) states in pertinent part: A district court may hear an appeal of a hearing examiner’s award only on the grounds that the arbitration panel was without jurisdiction or exceeded its jurisdiction or that the order was procured by fraud, collusion, or other unlawful means. Id. § 143.1016(j).[5] In this case, we must decide whether Section 143.1016(j) affords the City a right of appeal from an independent hearing examiner’s decision, or whether the Legislature intended the limited appeal in subjection (j) to apply exclusively to fire fighters and police officers. A In interpreting Section 143.1016(j), our primary objective is to ascertain and give effect to the Legislature’s intent. See McIntyre v. Ramirez, 109 S.W.3d 741, 745 (Tex. 2003). In discerning that intent, we begin with the “‘plain and common meaning of the statute’s words.’“ Id. (quoting State Dep’t of Highways & Pub. Transp. v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002)). Words and phrases are to be read in context and, in construing a statute, we may consider the consequences of a particular construction. Tex. Gov’t Code §§ 311.011, 311.023(5). Section 143.1016(j), by its own terms, does not allocate the right to appeal an independent hearing examiner’s decision to any particular party, although it does expressly restrict the scope of that appeal. This general right is in stark contrast to other portions of the Code, which explicitly afford appellate rights only to fire fighters and police officers. See Tex. Loc. Gov’t Code §§ 143.010(a) (“[I]f a fire fighter or police officer wants to appeal to the commission . . . , the fire fighter or police officer need only file an appeal with the commission . . . .”); 143.015(a) (“If a fire fighter or police officer is dissatisfied with any commission decision, the fire fighter or police officer may file a petition in district court asking that the decision be set aside.”); 143.034(a) (allowing promotional candidates from the fire or police department to appeal to the commission if they are dissatisfied with the review of their examination); 143.053(b) (allowing a suspended fire fighter or police officer to appeal a suspension to the Commission); see also id. §§ 143.1015(a); 143.1016(c); 143.117(e); 143.120(a). In the context of the entire Code, we believe this distinction is meaningful. See PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 84 (Tex. 2004) (“When the Legislature includes a right or remedy in one part of a code but omits it in another, that may be precisely what the Legislature intended” and “we must honor that difference”). Throughout Chapter 143, fire fighters and police officers are uniformly granted the right to appeal adverse recommendations, proposed solutions or decisions when the decisionmaker is the Commission or a Commission appointee. See City of Houston v. Jackson, ___ S.W.3d ___, ___ (Tex. 2006) (discussing the various appeals tracks afforded aggrieved officers under the grievance procedure codified in Sections 143.127-143.134). In those instances, the decisionmakers are closely aligned with the municipalities that have chosen to be governed by Chapter 143 of the Code. See, e.g., Tex. Loc. Gov’t Code ' 143.006(b) (explaining that the Commission consists of three members appointed by the municipality’s chief executive and confirmed by the governing body of the municipality). The allocation of appellate rights only to aggrieved officers in such situations acknowledges this implicit alignment. However, an appeal from an independent hearing examiner’s award differs categorically from the appeal of a decision made by the fire or police department, a Commission-appointed grievance examiner, or the Commission itself. Selected only after the aggrieved officer’s and the department head’s mutual agreement,[6] an independent hearing examiner has no implicit Commission alignment. Id. § 143.1016(d). Consequently, there would be no apparent reason for the Legislature to foreclose a right of appeal to either party. We believe the general language the Legislature chose to describe the right of appeal under Section 143.1016(j) was deliberate and not intended to foreclose a municipality’s appellate rights. Clark contends that, had the Legislature intended to authorize the City to appeal an independent hearing examiner’s decision, it would have expressly provided for such a right. Of course, the flip side is also true; the Legislature could have as easily expressly limited appellate rights under Section 143.1016(j) solely to aggrieved officers, as it did many times throughout other sections of the Code. Instead, Section 143.1016(j) states generally that “[a] district court may hear an appeal of a hearing examiner’s award,” specifically foreclosing the right to neither party. Id. § 143.1016(j) (emphasis added). Clark next argues that Section 143.1016(j) does not create a right to appeal, but merely defines the contours of the right established in Section 143.1016(c). In essence, Clark suggests that the portions of Section 143.1016(c) informing fire fighters and police officers of their limited right of review on appeal would be rendered surplusage if all parties before a hearing examiner were provided the same right to appeal under Section 143.1016(j). We disagree. The specific reference to fire fighters and police officers in Section 143.1016(c) is best understood when viewing the Code in its entirety, as we must. See, e.g., Fleming Foods of Tex. v. Rylander, 6 S.W.3d 278, 284 (Tex. 1999). The Legislature’s apparent purpose in Section 143.1016(c) was to ensure that fire fighters and police officers are fully aware of a significant consequence that will result if they elect to have an independent hearing examiner, rather than the Commission, hear their appeal.[7] Appeals from an independent hearing examiner’s decision are severely circumscribed, while appeals from a Commission decision to district court are reviewed de novo. Id. § 143.015(a)-(b). Since at this early stage it is up to the aggrieved officer which course to pursue, the legislative warning is understandable. Section 143.1016(c) merely reinforces the notion that aggrieved officers should proceed with caution when considering their various appeal options. We also note that, while affording police officers and fire fighters a unilateral right of review makes sense when appeal is from the decisions of Commission appointees or the Commission itself, see, e.g., Tex. Loc. Gov’t Code § 143.006(b), Clark has offered no reason why the Legislature would grant only a unilateral right to appeal a decision made by an independent hearing examiner who is not appointed by or affiliated with the municipality. Clark points to the fact that police officers and fire fighters give up de novo district court review when they choose to proceed before an independent hearing examiner, but that appeals route is equally foreclosed to the Commission once the grievant’s selection of an independent hearing examiner has been made. As we have said, “[t]he Legislature can . . . delegate authority to private entities ‘if the legislative purpose is discernible and there is protection against the arbitrary exercise of power.’“ Proctor, 972 S.W.2d at 735 (quoting Office of Pub. Ins. Counsel v. Tex. Auto. Ins. Plan, 860 S.W.2d 231, 237 (Tex. App.—Austin 1993, writ denied). Under Clark’s interpretation, cities could be hamstrung by an independent hearing examiner’s arbitrary or even fraudulent decision without recourse. We cannot see how the public interest is served by such a result. See Tex. Gov’t Code ' 311.021 (“In enacting a statute, it is presumed that . . . a just and reasonable result is intended . . . and public interest is favored over any private interest.”). In addition, interpreting Section 143.1016(j) to foreclose municipalities’ appellate rights could well render the Legislature’s delegation of authority to independent hearing examiners constitutionally suspect. See Texas Boll Weevil Eradication Found., 952 S.W.2d at 472. When faced with multiple constructions of a statute, we must interpret the statutory language in a manner that renders it constitutional if it is possible to do so; “[s]tatutes are given a construction consistent with constitutional requirements, when possible, because the legislature is presumed to have intended compliance with [the constitution].” Brady v. Fourteenth Court of Appeals, 795 S.W.2d 712, 715 (Tex. 1990); see also Tex. Gov’t Code § 311.021 (stating “[i]n enacting a statute, it is presumed that: (1) compliance with the constitutions of this state and the United States is intended”). Our interpretation of the statutory language is based on its plain language and context, and further avoids a constitutionally suspect construction. Our holding also finds support in the historical roots of the hearing examiner provisions currently codified in the Local Government Code, to which we now turn. B Section 143.1016 was added to the Local Government Code in 1989, just two years after the Code was created as a result of the Legislature’s directive to reclassify and rearrange Texas’ statutes in a more logical order.[8] Section 143.1016, which incorporates a hearing examiner provision specifically for municipalities with a population of 1.5 million or more, was based on the language of Section 143.057, the hearing examiner provision applicable to all municipalities governed by Chapter 143 of the Code.[9] The Bill Analysis from the legislation enacting Section 143.1016 explains that the bill “[a]mends Chapter 143, Local Government Code, by adding Section 143.1016. This section duplicates Sec. 143.057 except as described as follows.” Sen. Comm. on Urban Affairs, Bill Analysis, Tex. S.B. 688, 71st Leg., R.S. (1989). The “as follows” describes certain differences between Sections 143.057 and 143.1016, but none relate to the provisions affecting appeals from an independent hearing examiner’s decision. In fact, the appeals provisions in Sections 143.1016(c) and (j) are identical to those found in Sections 143.057(c) and (j). Therefore, it seems likely that the Legislature intended to provide the City of Houston the same right to appeal an independent hearing examiner’s decision under Sections 143.1016(c) and (j) as that provided other municipalities under Sections 143.057(c) and (j). That being the case, the historical development of the hearing examiner provision codified in Section 143.057 informs our analysis of municipalities’ right to appeal an adverse independent hearing examiner’s decision under Section 143.1016(j). See Tex. Gov’t Code ' 311.023(4) (“In construing a statute . . . a court may consider . . . former statutory provisions, including laws on the same or similar subjects.”). The history of independent hearing examiners in the section of Texas’ civil statutes governing cities, towns and villages can be traced to a 1983 amendment to article 1269m, which created the following sections: Sec. 16c. HEARING EXAMINERS. (a) In a city having a population of less than 1,500,000 according to the most recent federal census, in an appeal of an indefinite suspension, a suspension, a promotional passover, or a recommended demotion, the appealing employee may elect to appeal to an independent third party hearing examiner instead of to the commission. To exercise this choice, the appealing employee must submit a letter to the director stating his decision to appeal to an independent third party hearing examiner. (b) The decision of the hearing examiner is final and binding on all parties. If the employee decides to appeal to an independent third party hearing examiner, the employee automatically waives all rights to appeal to district court. . . . (f) A state district court may hear appeals of an award of a hearing examiner only on the grounds that the arbitration panel was without jurisdiction or exceeded its jurisdiction or that the order was procured by fraud, collusion, or other unlawful means. An appeal must be brought in the state district court having jurisdiction in the municipality in which the department is located. Act of May 30, 68th Leg., R.S., ch. 420, § 9, 1983 Tex. Gen. Laws 2246, 2265-67 (emphasis added). The 1983 legislation added new Section 16c to apply to all civil service cities of less than 1,500,000. House Comm. on Urban Affairs, Bill Analysis, Tex. H.B. 1015, 68th Leg., R.S. (1983). The Bill Analysis explains that Section 16c provides for “the use of independent third-party hearing examiners instead of the Commission[. I]f the appealing employee elects to use the [hearing] examiner he waives all right to appeal to District Court.” Id. at page 3. Therefore, after 1983, an employee could choose an independent hearing examiner to hear an appeal of a disciplinary suspension, but was required to waive all rights to appeal the examiner’s decision to the district court. And yet, Section 16c(f) unambiguously envisions a limited appeal of the examiner’s decision to state district court. In light of the wholesale prohibition of employee appeal rights, the limited appellate right referenced in 16c(f) could only have referred to that of the municipality. In 1985, the Legislature amended Section 16c in two separate bills. The first amendment expanded the use of independent hearing examiners to City of Houston employees by eliminating the provision’s restriction to those cities with a population of less than 1.5 million: (a) In a city in this state that has adopted this Act [having a population of less than 1,500,000 according to the most recent federal census], in an appeal of an indefinite suspension, a suspension, a promotional passover, or a recommended demotion, the appealing employee may elect to appeal to an independent third party hearing examiner instead of to the commission. To exercise this choice, the appealing employee must submit a letter to the director stating his decision to appeal to an independent third party hearing examiner. Act of May 27, 1985, 69th Leg., R.S., ch. 958, § 7, 1985 Tex. Gen. Laws, 3227, 3231 (emphasis in original). The Bill Analysis describes the change to Section 16c(a) as: “Amends Section 16(c) of [article] 1269m by adding cities of 1,500,000 or more to those who may elect to appeal to a hearing examiner.” Sen. Comm. on Urban Affairs, Bill Analysis, Tex. S.B. 540, 69th Leg., R.S. (1985). With this amendment, the right to have an independent hearing examiner hear the appeal of a disciplinary suspension was extended to City of Houston employees. The second amendment to Section 16c required that municipalities inform employees in the letter of disciplinary action that they would have the right to appeal an examiner’s decision, as limited by Section 16c(f), which right had been expressly precluded in the 1983 legislation. Section 16c(a) was amended, in pertinent part, as follows: (a) In a city having a population of less than 1,500,000 according to the most recent federal census, the letter of disciplinary action issued to an employee shall state, in addition to other notice requirements prescribed by this Act, that in an appeal of an indefinite suspension, a suspension, a promotional passover, or a recommended demotion, the appealing employee may elect to appeal to an independent third party hearing examiner instead of to the commission. The letter must also state that if the employee elects to appeal to a hearing examiner, the employee waives all rights of appeal to a district court except as provided by Subsection (f) of this section. To exercise this choice, the appealing employee must submit [a letter] to the director a written request as part of the original notice of appeal required under Section 16b(b) of this Act stating his decision to appeal to an independent third party hearing examiner. Act of May 26, 1985, 69th Leg., R.S. ch. 910, § 5(a), 1985 Tex. Gen. Laws 3046, 3052. This second amendment requires the department to provide notice to the employee of (1) a right to appeal the disciplinary action to an independent hearing examiner, and (2) the consequences on the scope of the employee’s appellate rights—described in Subsection (f), which mirrors the limitations of Section 143.1016(j)—if the employee chooses that route. In explaining this amendment to Section 16c(a), the Bill Analysis describes the change as “adding requirements to the content of a letter of disciplinary action.” House Comm. on Urban Affairs, Bill Analysis, Tex. H.B. 1657, 69th Leg., R.S. (1985). The effect of this amendment is problematic in that Section 16c(b) was not amended at all in 1985, and continued to say that, if the employee decides to appeal to a hearing examiner, “the employee automatically waives all rights to appeal to district court.” Act of May 30, 1983, 68th Leg., R.S., ch. 420, § 9, 1983 Tex. Gen. Laws 2246, 2266. Clearly, the two provisions are not compatible and it was unclear whether employees were authorized to appeal a hearing examiner’s decision after 1985. But the inconsistency was short lived, as the Legislature amended Section 16c(b) to explicitly afford employees the right to appeal an examiner’s decision, as circumscribed by Section 16c(f), which eliminated the tension between the provisions. In 1987, Texas’ civil statutes affecting cities, towns, and villages were recodified into the Local Government Code by Senate Bill 896. See Act of April 30, 1987, 70th Leg., R.S., ch. 149, § 1, 1987 Tex. Gen. Laws 707, 906. The Bill Analysis explained the Texas Legislative Council’s mandate to codify Texas’ civil statutes and noted that the purpose of the bill was “a nonsubstantive revision of the Texas statutes relating to local government, primarily cities and counties.” Sen. Comm. on State Affairs, Bill Analysis, Tex. S.B. 896, 70th Leg., R.S. (1987). Senate Bill 896’s proposed language for Section 143.057(c) merely strips out Section 16c(b)’s denial of any right to appeal and inserted the right to an appeal as limited by current Section 143.057(j). See Tex. Loc. Gov’t Code §§ 143.057(c), (j). Nothing in the text of the bill, the Bill Analysis, or the Revisor’s Notes indicates that the text of current Section 143.057(c) was altered during the recodification process to read “the employee automatically waives all rights to appeal to district court except as provided by Subsection (j).” Id. § 143.057(c) (emphasis added). Nevertheless, the change appears to have been made in the 1987 recodification. Whether or not the Legislature intended to provide employees the right to appeal a hearing examiner’s decision in 1985 or 1987, the fact remains that appeals to district court were allowed in 1983 even though employees were unambiguously denied such a right. This historical reconstruction strongly suggests that when the Legislature created the independent hearing examiner option in 1983, municipalities, indeed only municipalities, were afforded a limited right to appeal the examiner’s decision, and there is nothing to indicate that municipalities do not retain that right today. We conclude that Chapter 143 does not preclude the City of Houston from appealing the independent hearing examiner’s adverse decision in this case. That appeal, however, is restricted by the scope of review described in Section 143.1016(j), i.e., that the hearing examiner was without jurisdiction or exceeded that jurisdiction or the order was procured by fraud, collusion or other unlawful means. Tex. Loc. Gov’t Code § 143.1016(j). The City claims its appeal fits within Section 143.1016(j)’s limited scope because the hearing examiner acted without or exceeded his jurisdiction by erroneously deciding that an acting fire chief is not authorized to suspend fire department personnel. Clark responds that the acting fire chief had no authority to suspend, but even if he did, the hearing examiner’s decision to the contrary was nevertheless within the examiner’s jurisdiction and thus unassailable under Section 143.1016(j). Because the court of appeals dismissed the City’s appeal, it did not reach these issues. Of course, if the right of appeal provided by Section 143.1016(j) does not afford a city meaningful review of the merits of a decision, as Clark appears to argue, delegation of grievance decisions to an independent hearing examiner may raise constitutional problems. See Tex. Boll Weevil Eradication Found., 952 S.W.2d at 472. The City takes a much broader view of the issues the provision would allow to be raised on appeal. But the precise scope of the appeal provided by Section 143.1016(j) and its effect on cities have not been fully presented in this Court. See Proctor, 972 S.W.2d at 735 (declining to decide whether the Legislature impermissibly delegated authority to hear appeals to a private decisionmaker under Section 143.057(d) of the Local Government Code since that question was not properly framed by the City). Having concluded that the court of appeals erred in dismissing the appeal, we remand the case to that court for consideration of the parties’ arguments on these issues and others. IV. Conclusion We hold that Section 143.1016(j) of the Local Government Code affords the City of Houston the right to appeal the independent hearing examiner’s adverse decision in this case, and the court of appeals erred in dismissing the City’s appeal. Accordingly, we reverse the court of appeals’ judgment dismissing the City’s appeal for want of jurisdiction and remand the case to that court for further proceedings. __________________________________________ Harriet O’Neill Justice OPINION DELIVERED: June 30, 2006 [1] The court of appeals noted that any contradiction in the simultaneous decisions was not material to the outcome of the appeal. 142 S.W.3d 350, 354. We agree. [2] Section 143.117(a) of the Code provides: “The head of the fire or police department may suspend a fire fighter or police officer under the department head’s supervision or jurisdiction for disciplinary reasons for a reasonable period not to exceed 15 days.” Id. § 143.117(a). The Code defines “department head” as “the chief or head of a fire or police department or that person’s equivalent, regardless of the name or title used.” Id. § 143.003(2). [3] The City argued: (1) the hearing examiner ignored the provisions of Chapter 143 of the Local Government Code and improperly interpreted the term “department head”; (2) Rivera does not control the present case under the doctrine of stare decisis; (3) the hearing examiner had jurisdiction to decide the merits of the suspension; (4) the hearing examiner did not have jurisdiction to determine that the acting fire chief did not have the authority to issue a suspension; (5) only the City had the authority to determine who could act as the equivalent of the fire chief; (6) the hearing examiner did not have standing to compel the City to follow procedures it was not legally required to follow; and (7) the City enjoyed governmental immunity. [4] We note the similarity between Sections 143.1016 and 143.057 of the Local Government Code. Section 143.057 applies to all municipalities governed by Chapter 143, while Section 143.1016 applies only to those municipalities with a population of 1.5 million or more. See Tex. Loc. Gov’t Code § 143.101. As we explain herein, Section 143.1016 was modeled on the language of Section 143.057. In particular, the language governing appeals of independent hearing examiner decisions in Sections 143.1016(c) and (j) exactly duplicates that of Sections 143.057(c) and (j). Therefore, our decision today is not limited to the City of Houston; it applies with equal force to all municipalities governed by Chapter 143 of the Local Government Code. [5] The Legislature’s use of the phrase “arbitration panel” is difficult to explain in the context of appeals to individual independent hearing examiners under Section 143.1016, since the hearing examiner, not an arbitration panel, provides a final decision. For purposes of this case, we presume Section 143.1016(j)’s reference to “arbitration panel” includes an independent hearing examiner. [6] If no agreement can be reached, the Code provides a mechanism for the selection of an arbitrator from the American Arbitration Association or the Federal Mediation and Conciliation Service. Id. [7] As a further warning, the Legislature required the letter of disciplinary action issued to a fire fighter or police officer to state that if the fire fighter or police officer opted for an independent hearing examiner to oversee the appeal, the person waives all rights to a district court appeal except as provided in Section 143.1016(j). Tex. Loc. Gov’t Code § 143.1016(a). [8] Act of May 25, 1989, 71st Leg., R.S., ch. 854, § 4, 1989 Tex. Gen. Laws 3829; see Tex. Gov’t Code § 323.007 (requiring the Texas Legislative Council to plan and execute a permanent statutory revision program, but without altering the sense, meaning, or effect of the statutes). [9] See Tex. Loc. Gov’t Code § 143.057; see also id. § 143.002 (explaining that this Chapter applies only to a municipality: (1) that (A) has a population of 10,000 or more; (B) has a paid fire department and police department; and (C) has voted to adopt this chapter or the law codified by this chapter; or (2) whose election to adopt this chapter and whose acts subsequent to that election were validated by the law enacted by House Bill 822, Acts of the 73rd Legislature, Regular Session, 1993).

In re Dallas Peterbilt 196. S.W.3d 161 (Tex. 2006)

In re Dallas Peterbilt, Ltd., No. 05-0706 (Tex. Jun. 16, 2006)(per curiam)(arbitration, employment) In re Dallas Peterbilt, Ltd., L.L.P., Relator ═══════════════════════ On Petition for Writ of Mandamus ═══════════════════════ PER CURIAM In this original proceeding, relator Dallas Peterbilt, Ltd., L.L.P. seeks to compel arbitration of claims filed by its former employee, William Harris. The trial court denied Peterbilt’s motion to stay proceedings and to compel arbitration, and the court of appeals summarily denied mandamus relief. __ S.W.3d __, 2005 Tex. App. LEXIS 6768. Because the parties entered into a binding arbitration agreement that covers Harris’s claims, we conclude that the trial court abused its discretion in denying Peterbilt’s motion to compel arbitration. We conditionally grant mandamus relief. On January 1, 1999, American TruckSource, Inc., Peterbilt’s holding company, instituted a dispute resolution program. Part of this program required employees to resolve certain work-related disputes via binding arbitration. When Harris commenced his at-will employment with Peterbilt in December 1999, he received a copy of a “Summary Plan Description of Mutual Agreement to Arbitrate Claims” (Summary), which outlined the Mutual Agreement to Arbitrate Claims. Harris claims he never received the Mutual Agreement to Arbitrate Claims, which is part of the record, but he signed an acknowledgment form indicating that he received the Summary and understood that by accepting employment, he was relinquishing his right to resolve covered claims “by filing a lawsuit or seeking damages in any federal, state, or municipal court of law . . . .” The Summary’s list of covered claims includes tort, discrimination, harassment, wrongful termination, and also “[c]laims for a violation of any federal, state, or other governmental law.” In March 2002, Peterbilt terminated Harris’s employment, and in 2003, rather than request arbitration, Harris filed suit against Peterbilt in state district court for discrimination, retaliation, defamation, and other torts. Peterbilt then sought to compel arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1–16. An employer may enforce an arbitration agreement entered into during an at-will employment relationship if the employee received notice of the employer’s arbitration policy and accepted it. In re Dillard Dep’t Stores, Inc., __ S.W.3d __,__, 2006 Tex. LEXIS 196, at *2 (Tex. 2006) (per curiam) (citing In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002)). In granting mandamus relief in Halliburton, we stressed the importance of notice and emphasized that the employee there received a one-page summary of the agreement to arbitrate. 80 S.W.3d at 568–69; see also Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 229 (Tex. 1986) (holding that notice is provided if the employee has knowledge of the employment terms). Harris argues that the Summary is immaterial and that only the underlying agreement itself, which he says he never received, can provide notice. We disagree. When determining whether an employee received notice of a binding arbitration agreement, our cases do not confine that “notice analysis” to the underlying agreement, but to all communications between the employer and employee. See In re Halliburton Co., 80 S.W.3d at 569 (holding that a notice and summary given to the employee was unequivocal notice); Hathaway, 711 S.W.2d at 229 (holding that contradicting written and oral communications did not constitute conclusive proof of unequivocal notice). The six-page Summary and accompanying signed acknowledgment form notified Harris that arbitration would be required for resolving covered claims and specifically described which claims are covered under the plan. Harris contends he did not receive the Summary either. But the acknowledgment form states, right above his signature: “I acknowledge that I have received and carefully read or been given the opportunity to read the [Summary].” Consequently, we find that Peterbilt’s Summary constitutes effective notice because it unequivocally provided Harris with knowledge of the arbitration agreement. See In re Dillard Dep’t Stores, Inc., __ S.W.3d at __, 2006 Tex. LEXIS 196, at *2. Having established that Harris received notice of the binding arbitration agreement, we next determine whether Harris accepted the agreement. An at-will employee who receives notice of an employer’s arbitration policy and continues working with knowledge of the policy accepts the terms as a matter of law. Id. It is undisputed that Harris was an at-will employee, and his signed acknowledgment form indicates that continuing or accepting employment will result in automatic coverage under the dispute resolution program. Therefore, we find that by signing the acknowledgment form and commencing his employment, Harris accepted the agreement as a matter of law. In order to compel arbitration, Peterbilt must also show that the claims raised fall within the scope of the agreement. In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex. 1999) (per curiam). Harris sued Peterbilt for race discrimination, retaliation, tortious interference, defamation, and intentional infliction of emotional distress. The Summary provides that the agreement covers claims for tort, discrimination, wrongful termination, and violation of law. The Mutual Agreement to Arbitrate Claims confirms that those claims are covered. We hold that the claims covered under the agreement include all claims that Harris brought against Peterbilt. We conclude that a valid arbitration agreement exists and that Harris’s claims fall within the scope of the agreement. The trial court clearly abused its discretion in denying Peterbilt’s motion to compel arbitration. See Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272–73 (Tex. 1992) (noting there is no adequate remedy by appeal for a party denied its contracted-for arbitration right under the FAA). Accordingly, without hearing oral argument, we conditionally grant the writ of mandamus. Tex. R. App. P. 52.8(c). We order the trial court to vacate its order denying Peterbilt’s motion to compel arbitration and to enter a new order compelling arbitration of Harris’s claims. The writ will issue only if the trial court fails to comply. Opinion delivered: June 16, 2006