Court of Appeals of Texas, Dallas.

IN RE LEADERSHIP FORD, INC., Relator.

No. 05-99-00618-CV.

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June 25, 1999.

Before KINKEADE, ROACH, and O’NEILL, JJ.

OPINION AND ORDER

ROACH.

*1 In this original proceeding, Leadership Ford, Inc. seeks relief from the denial of its motion to compel arbitration. Leadership Ford asserts the trial court abused its discretion in denying arbitration under the Federal Arbitration Act (FAA) of an employee’s claim for damages from an on-the-job injury because the employee participated in and received benefits from an Employee Retirement Income Security Act (ERISA) plan that required arbitration of all claims within its scope. We agree with Leadership Ford and conditionally grant the writ.

Wesly Hitzfeld began work at Leadership Ford as a mechanic in 1994. The following year, Leadership Ford elected not to cover its employees under the Texas Workers’ Compensation Act. Instead, it offered its employees an optional ERISA plan. The plan provided medical care and wage continuation benefits and death benefits to employees who suffered on-the-job injuries in exchange for the employees’ agreement to waive and release Leadership Ford from claims of negligence resulting in occupational injury, death, or disability. Further, the plan required arbitration of claims falling within its scope. Employees had the choice of whether to participate in the plan; Hitzfeld accepted the plan.

In 1997, Hitzfeld injured his back on the job and received pay and medical benefits pursuant to the plan for the injury. Thereafter, he and his wife sued Leadership Ford-without first submitting the claim to arbitration-claiming its negligence caused Hitzfeld’s on-the-job injuries. Leadership Ford moved to compel arbitration under the Texas and federal arbitration acts.

At the hearing on the motion to compel, Leadership Ford’s plan administrator and plan manager each testified that at the time the plan was implemented, Leadership Ford held meetings to explain the ERISA plan and a 401(k) plan to employees. The meetings were held on the same day at a nearby hotel with about thirty employees attending each session. The third-party administrator explained the plan and, at the conclusion of the meetings, the employees were required to sign a document accepting the plan or rejecting the plan. Both testified that Hitzfeld signed the plan in acceptance of it. Employees who opted not to accept the plan were not terminated.

In contrast to this evidence, Hitzfeld testified that he never attended a meeting concerning the plan. Instead, he said he was called to an office where his supervisor told him he would not receive his paycheck until he signed the document. When Hitzfeld asked about the contents of the document, he was told that it said Leadership Ford “didn’t have workers’ compensation.” Hitzfeld said he signed the plan because he believed he would not be paid and could be terminated.¹ Hitzfeld said he did remember attending a meeting concerning the 401(k) plan.

After considering the evidence presented, the trial court denied Leadership Ford’s motion to compel. Leadership Ford then filed this petition for writ of mandamus requesting this Court to order the trial court to vacate its order denying arbitration and to enter an order compelling arbitration under the FAA.

*2 A threshold issue in this case is whether the FAA applies to this arbitration clause. In Texas, mandamus relief is available to a party who is improperly denied arbitration under an agreement that incorporates the FAA. See EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 88 (Tex.1996) (per curiam). The FAA applies to contracts “evidencing a transaction involving commerce.” 9 U.S.C. § 2 (1970). Commerce under the FAA is broadly construed, and whether a particular arbitration agreement is controlled by the FAA is determined by whether the contract relates to interstate commerce. See Perry v. Thomas, 482 U.S. 483, 489, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 271 (Tex.1992). The FAA’s words “involving commerce” are interpreted the same as “affecting commerce,” which signal Congress’s intent to exercise its power to the fullest. See Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 273-78, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995).

Hitzfeld does not dispute that the plan contains the provision at issue. Rather, he contends the FAA does not apply for two reasons. First, he contends the transaction at issue-the Election of Benefits document-does not involve commerce. We disagree.

“[T]he creation of an employment relationship which involved commerce is a sufficient ‘transaction’ to fall within section 2 of the Act.” White-Weld & Co. v. Mosser, 587 S.W.2d 485, 487 (Tex.Civ.App.-Dallas 1979, writ ref’d n.r.e.) (citing Dickstein v. du Pont, 443 F.2d 783, 785 (1st Cir.1971)), cert. denied, 446 U.S. 966 (1980); BWI Cos. v. Kurtenbach, 910 S.W.2d 620, 622 (Tex.App.-Austin 1995, orig. proceeding). Thus, if Hitzfeld’s employment relationship involves “commerce” within the meaning of section 2, the FAA governs the arbitration agreement. BWI Cos., 910 S.W.2d at 622.

At the hearing, Leadership Ford presented evidence that it buys new and used vehicles and vehicle parts outside the state of Texas for resale in Texas. Furthermore, Hitzfeld stipulated that Leadership Ford does interstate business. We therefore conclude Leadership’s relationship with its employees involves “commerce” as that term is used in the FAA. See BWI Cos., 910 S.W.2d at 623-24 (employment contract involved interstate commerce because employer’s business operations fell within Congress’s regulatory power, even though employee worked only in Texas).

Second, Hitzfeld contends the FAA does not apply because the controversy does not arise “out of such contract” as required by the statute. Hitzfeld argues that the plan and its arbitration agreement are not invoked because he is not making a claim for benefits under the plan. Instead, he asserts he is seeking damages for personal injuries sustained at work. Again, we disagree.

*3 Regardless of how Hitzfeld characterizes his claim, he is making a claim for an injury he suffered on the job. The plan in this case applies to all claims for on-the-job injuries, and Hitzfeld accepted benefits under the plan for those injuries. Consequently, Hitzfeld has invoked the plan in this case. Because the contract “evidences a transaction involving commerce” and the controversy arises out of the contract, we conclude the FAA governs this dispute.

Having so concluded, we now consider the trial court’s ruling denying the motion to compel. We review a trial court’s finding regarding the existence of an agreement to arbitrate under an abuse of discretion standard. See Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 900 (Tex.1995) (orig. proceeding).

Leadership Ford asserts the trial court abused its discretion in denying its motion because Hitzfeld accepted the plan, his claims fall within the scope of the plan, and he agreed to arbitrate any claims. An agreement to arbitrate is valid, irrevocable, and enforceable unless grounds exist at law or in equity for the revocation of any contract, such as fraud or unconscionability. 9 U.S.C. § 2 (1970); Allied-Bruce, 513 U.S. at 280-82; Palm Harbor Homes, Inc. v. McCoy, 944 S.W.2d 716, 721 (Tex.App.-Fort Worth 1997, orig. proceeding) (per curiam). Hitzfeld argues the plan, as well as its arbitration agreement, is unenforceable because it (1) is unconscionable and (2) was obtained by fraud or duress. In particular, he complains that he was forced to sign the plan under the threat of not being paid, was not given the plan in advance, was not permitted to read it prior to signing it, and was misled as to its contents.

Federal law includes a liberal policy favoring arbitration agreements, notwithstanding any state law or policy to the contrary. See Allied-Bruce, 513 U.S. at 281. The courts are to resolve doubts about enforcing arbitration agreements in favor of arbitration. See Cantella & Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex.1996). The test generally applied by the federal courts to determine whether a claim of fraud or unconscionability must be decided by the trial court or sent to arbitration is as follows:

[I]f the claim is fraud in the inducement of the arbitration clause itself-an issue which goes to the “making” of the agreement to arbitrate-the federal court may proceed to adjudicate it. But the statutory language [of the FAA] does not permit the federal court to consider claims of fraud in the inducement of the contract generally.

See Shearson Lehman Bros., Inc. v. Kilgore, 871 S.W.2d 925, 928 (Tex.App.-Corpus Christi 1994, orig. proceeding), (citing Bhatia v. Johnston, 818 F.2d 418, 421 (5th Cir.1987) (citing Prima Pain Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967)). Thus, whether a contract as a whole is unconscionable is a question for the arbitrator. See Rojas v. TK Communications, Inc., 87 F.3d 745, 749 (5th Cir.1996) (arbitration ordered under FAA on sexual harassment claim when work involves interstate commerce; claim contract of adhesion goes to contract as a whole so decided by arbitrator). Similarly, if an allegation of fraud in the inducement goes to the whole contract and not just the arbitration clause, the arbitrator is to decide the issue. See Miller v. Public Storage Management, Inc., 121 F.3d 215, 218-19 (5th Cir.1997) (contract with arbitration clause covering claims for on-the-job injuries and termination covered by FAA; fraud allegations went to contract as whole so arbitrator decides all). Further, arbitration agreements in the employer-employee context are not per se unconscionable. EZ Pawn, 934 S.W.2d at 90. As with all contracts, a party’s failure to read an arbitration agreement before signing does not excuse the party from the requirements of the signed agreement. Id. at 90. The unequal bargaining power of the employer-employee relationship does not establish grounds for defeating an arbitration agreement under the FAA. Id.

*4 Hitzfeld’s arguments do not attack only the arbitration provision; they attack the plan as a whole. As such, these complaints are matters for the arbitrator to decide. See Rojas, 87 F.3d at 749; Miller, 121 F.3d at 218-19. AA; Shearson Lehman Bros., 871 S.W.2d at 928-29. Furthermore, we note that Hitzfeld accepted ERISA benefits after his injury. He did not return those benefits after he knew Leadership Ford intended to enforce the plan’s requirements. Consequently, Hitzfeld ratified his agreement to be bound by the plan and its arbitration requirement. See LSR Joint Venture No. 2 v. Callenwart, 837 S.W.2d 693, 699 (Tex.App.-Dallas 1992, writ denied); Spangler v. Jones, 797 S.W.2d 125, 131 (Tex.App.-Dallas 1990, writ denied). The trial court abused its discretion in denying Leadership Ford’s motion to compel arbitration.

In a second issue, Leadership Ford asserts the trial court must abate Mrs. Hitzfeld’s loss of consortium claim because it is derivative of her husband’s claim. Suit on a claim which is derivative of a claim sent to arbitration must be abated until completion of the arbitration. See Merrill Lynch, Pierce, Fenner, Smith, Inc. v. Longoria, 783 S.W.2d 229, 231 (Tex.App.-Corpus Christi 1989, orig. proceeding). Below, Leadership Ford requested the entire case be abated but did not specifically argue the derivative nature of Mrs. Hitzfeld’s claim as a reason to abate her claims. Nevertheless, because we have concluded the trial court abused its discretion in not ordering arbitration of Hitzfeld’s claims, we must conclude the trial court abused its discretion in failing to abate Mrs. Hitzfeld’s derivative claims until arbitration is completed.

A party erroneously denied the right to arbitrate under the FAA has no adequate remedy on appeal, and mandamus relief is appropriate. In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 574-75 (1999) (per curiam). Accordingly, we conditionally grant the writ of mandamus. We order the trial court to vacate its order denying arbitration and to enter an order compelling arbitration and abating the entire case until arbitration is completed. This writ will issue only in the event that the trial court fails to comply with this order. The trial court is to file with this Court a certified copy of its order in compliance with this order no later than thirty days from the date of this order.

	Footnotes
1		Hitzfeld signed a document entitled “Leadership Ford, Inc. Occupational Injury Benefit Plan Election of Benefits, Release, Waiver, Indemnity, and Arbitration Agreement.”