Opinion issued January 31, 2013.




                                    In The

                             Court of Appeals
                                   For The

                         First District of Texas
                          ————————————
                            NO. 01-12-00342-CV
                          ———————————
              SUPERBAG OPERATING CO., INC., Appellant
                                      V.
                       DONATO SANCHEZ, Appellee



                  On Appeal from the 125th District Court
                           Harris County, Texas
                     Trial Court Case No. 2011-65072


                        MEMORANDUM OPINION

      Donato Sanchez sued Superbag Operating Ltd., a non-subscriber to Texas’s

statutory workers’ compensation system, claiming that Superbag’s negligence and

gross negligence caused him to suffer a workplace injury. Superbag moved to

compel arbitration based on its ERISA plan documents, which require arbitration
of employment-related disputes that fall within the scope of the agreement. After

conducting a hearing, the trial court denied the motion to compel. Superbag

appeals that ruling. We conclude that a valid agreement to arbitrate exists between

Superbad and Sanchez; we therefore reverse.

                                  Background

      Superbag maintained an ERISA benefit plan to compensate employees for

any injuries that occurred within the course and scope of their employment. When

Superbag hired Sanchez in October 2007, Sanchez signed Spanish versions of the

relevant documents. First, he signed the

         Superbag Operating Ltd. Benefit Plan for Employee Injuries
         and Arbitration Program—Acknowledgment of Receipt and
         Arbitration
in which he acknowledged that

         I have received and have read (or had the opportunity to read) the
         Program of Benefits, the Description of the Summary of the
         Benefit Plan for Injuries, and the Mutual Agreement to Arbitrate
         Claims effective 09/01/05.
With respect to the arbitration program, the Acknowledgment declares:

         ARBITRATION: I acknowledge that this includes an obligatory
         policy of the company that requires that certain claims or disputes
         (which cannot be resolved in another manner between the
         Company and me) must be submitted to an arbitrator, instead
         of a judge or jury in the court. I understand that upon receiving
         this Mutual Agreement to Arbitrate Claims and to attain being an
         employee (or continue my employment) with the Company at any
         time on or after 09/01/05, I accept and agree to comply with these
         requirements for arbitration. I understand that the company also

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         accepts and is in agreement to comply with these requirements for
         arbitration.

(Emphasis in original). The mutual agreement defines “covered claims” as “[a]ny

injury suffered by Claimant while in the Course and Scope” of his employment.

Sanchez also signed an

         Agreement to Arbitrate under Arbitration Policy and Procedures
         This document provides:

         I agree to arbitration under the Arbitration Policy and Procedures
         (a copy of which I have been provided), in exchange for the
         Company considering this employment application and agreeing
         also to be bound by the Arbitration Policy and Procedures, any and
         all claims, disputes or controversies that exist now or arise later
         between me and the Company or between me and any of the
         Company employees, officers, partners, owners or affiliate
         companies, including claims, disputes and controversies arising
         before, during and after my employment, if any.

(Emphasis in original). Sanchez also signed

         Employee’s Recognition of Receipt of Arbitration Policy and
         Procedures
      In this document, Sanchez acknowledged that he received and read a

document entitled Arbitration Policy and Procedures from the Company and that

he understood (1) he should read it completely, (2) it constitutes a contractual

obligation between himself and the Company, and (3) it is a condition of his

continued employment with the Company or of any future position with the

Company to promise to submit to arbitration for any claim, dispute, or controversy,

either present or future, with the Company, its officers, directors, and employees.
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      It is undisputed, however, that the term “Arbitration Policy and Procedures”

in the latter two documents refer to a Superbag arbitration policy that was

superseded by Superbag’s September 1, 2005 “Mutual Agreement to Arbitrate

Claims”. It is the 2005 agreement that was included in the employee benefit

materials. Sanchez did not receive a document entitled “Arbitration Policy and

Procedure” from Superbag on the date of his hire.

      The 2005 arbitration policy attached to the summary plan description

(“SPD”) is the “Mutual Agreement to Arbitrate Claims,” a four-page description of

the arbitration procedure. The first page of the Mutual Agreement announces that

it is governed by the Federal Arbitration Act, and it further recites:

          ARBITRATION IS MANDATORY FOR COVERED
          CLAIMS: COVERED CLAIMS SHALL BE EXCLUSIVELY
          RESOLVED BY BINDING ARBITRATION. WHILE BOTH
          CLAIMANT     AND    COMPANY    RETAIN   ALL
          SUBSTANTIVE LEGAL RIGHTS AND REMEDIES UNDER
          THIS AGREEMENT, CLAIMANT AND COMPANY ARE
          BOTH WAIVING ALL RIGHTS WHICH EITHER MAY
          HAVE WITH REGARD TO TRIAL, WHETHER JURY OR
          NON-JURY, IN STATE OR FEDERAL COURT FOR ANY
          COVERED CLAIM. CLAIMANT AND COMPANY ALSO
          AGREE TO WAIVE ANY RIGHT THEY MAY HAVE TO
          CLASS ARBITRATION OR CONSOLIDATION OF
          INDIVIDUAL ARBITRATIONS FOR ANY COVERED
          CLAIMS.
   (Emphasis in original.)

      In May 2010, Sanchez was injured at work. Superbag’s ERISA plan paid

Sanchez’s medical bills and wage replacement benefits. In October 2011, Sanchez

                                           4
sued Superbag, seeking a recovery for the injuries he received in the May 2010

accident. Superbag moved to compel arbitration. Sanchez responded with an

affidavit, in which he averred that he had never received the documents referenced

in the acknowledgements that he had signed, that Superbag had fraudulently

procured his consent to arbitration, that he was unaware that he had agreed to

arbitrate his personal injury claims as a condition of his employment with

Superbag, and that his consent was invalid due to procedural unconscionability.

                                    Discussion

I.    Standard of review

      This proceeding arises under section 51.016 of the Texas Civil Practice and

Remedies Code, which permits the interlocutory appeal of an order denying a

motion to compel arbitration under the FAA.1 TEX. CIV. PRAC. & REM. CODE ANN.

§ 51.016 (West Supp. 2012). We review interlocutory appeals of orders denying

motions to compel arbitration for an abuse of discretion, deferring to the trial

court’s factual determinations if they are supported by the evidence and reviewing

questions of law de novo. Cleveland Constr., Inc. v. Levco Constr., Inc., 359

S.W.3d 843, 851–52 (Tex. App.—Houston [1st Dist.] 2012, pet. dism’d).

      If a party seeking arbitration carries its initial burden to prove the existence

of an agreement to arbitrate, then a strong presumption favoring arbitration arises,


1
      9 U.S.C.A. §§ 1–16 (West 1999 & Supp. 2012).
                                          5
 and the burden shifts to the party opposing arbitration to prove an affirmative

 defense to the agreement. J.M. Davidson, Inc., 128 S.W.3d at 227. The party

 opposing enforcement of an arbitration agreement may invoke the defenses of

 unconscionability, duress, fraudulent inducement, and revocation. In re FirstMerit

 Bank, N.A., 52 S.W.3d 749, 756 (Tex. 2001); see AT&T Mobility LLC v.

 Concepción, 131 S. Ct. 1740, 1746 (2011). To defeat arbitration, the defenses

 must specifically relate to the arbitration portion of the contract, not the contract as

 a whole. In re RLS Legal Solutions, LLC, 221 S.W.3d 629, 630 (Tex. 2007) (orig.

 proceeding). “[C]ourts should resolve any doubts as to the agreement’s scope,

 waiver, and other issues unrelated to its validity in favor of arbitration.” Ellis v.

 Schlimmer, 337 S.W.3d 860, 862 (Tex. 2011).

II.   Proving Arbitrability

       A party moving to compel arbitration must establish (1) the existence of a

 valid, enforceable arbitration agreement and (2) that the claims asserted fall within

 the scope of that agreement. Provine, 312 S.W.3d at 828–29. If the movant

 establishes that an arbitration agreement governs the dispute, the burden then shifts

 to the party opposing arbitration to establish a defense to the arbitration agreement.

 See In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex.1999) (orig.

 proceeding). A party may revoke the agreement only on a ground that exists at law

 or in equity for the revocation of a contract. TEX. CIV. PRAC. & REM. CODE ANN.

                                            6
§ 171.001 (West 2005). “Once the trial court concludes that the arbitration

agreement encompasses the claims, and that the party opposing arbitration has

failed to prove its defenses, the trial court has no discretion but to compel

arbitration and stay its own proceedings.” In re FirstMerit Bank, N.A., 52 S.W.3d

749, 753–54 (Tex. 2001).

      We apply ordinary state-law principles governing contracts to determine

whether the parties formed an agreement to arbitrate. J.M. Davidson, Inc. v.

Webster, 128 S.W.3d 223, 227–28 (Tex. 2003); see Sherer v. Green Tree Serv’g

LLC, 548 F.3d 379, 381 (5th Cir. 2008). “[A]bsent unmistakable evidence that the

parties intended to the contrary, it is the courts rather than the arbitrators that must

decide ‘gateway matters.’” In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex.

2005).

      An employer may enforce an arbitration agreement against an at-will

employee if the employee received notice of the employer’s arbitration policy and

accepted it. In re Dallas Peterbilt, Ltd., 196 S.W.3d 161, 162 (Tex. 2006). To

determine whether an employee was notified of the policy, we examine the

underlying agreement, as well as all of the communications between the employer

and employee. Dallas Peterbilt, 196 S.W.3d at 162 (citing In re Halliburton Co.,

80 S.W.3d 566, 569 (Tex. 2002), and Hathaway v. Gen. Mills, Inc., 711 S.W.2d

227, 229 (Tex. 1986)).

                                           7
III.   Analysis

       Superbag contends that it has produced an executed arbitration agreement,

and Sanchez failed to meet his burden to prove a valid defense to avoid arbitration.

Sanchez responds that the acknowledgements that he signed refer to two different

arbitration plans, each containing different arbitration procedures; thus, the parties

never formed a valid agreement to arbitrate.         Sanchez further responds that

Superbag fraudulently procured Sanchez’s agreement to arbitrate his claims

because he never received a copy of the agreement to arbitrate, assuming that an

agreement to arbitrate even exists. Finally, Sanchez responds that any agreement

to arbitrate is void due to procedural unconscionability. We address these issues in

turn to determine whether the record supports the trial court’s refusal to compel

arbitration.

       A. Contract formation

       For an agreement to be enforceable, the parties must mutually consent to its

subject matter and essential terms. John Wood Group USA, Inc. v. ICO, Inc., 26

S.W.3d 12, 20 (Tex. App.—Houston [1st Dist.] 2000, pet. denied); see FORECA,

S.A. v. GRD Dev. Co., 758 S.W.2d 744 (Tex. 1988). The party seeking to compel

arbitration must satisfy these basic requirements and show that a valid arbitration

agreement exists before they are entitled to invoke the presumption favoring

arbitration. See Sherer, 548 F.3d at 381; see also In re Kellogg Brown & Root,

                                          8
Inc., 166 S.W.3d 732, 737–38 (Tex. 2005) (stating that presumption favoring

arbitration arises only after party seeking to compel arbitration establishes valid

agreement to arbitrate, because purpose of FAA is to “‘make arbitration

agreements as enforceable as other contracts, not more so’”) (quoting Bridas

S.A.P.I.C. v.. Gov’t of Turkmenistan, 345 F.3d 347, 354 n.4 (5th Cir. 2003)).

      The determination of a meeting of the minds, and thus offer and acceptance,

is based on the objective standard of what the parties said and did. Id. The

question of whether a contract contains all the essential terms for it to be

enforceable is a question of law. We determine whether terms are material or

essential on a contract-by-contract basis, depending on the subject matter of the

contract at issue. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218,

221 (Tex. 1992) (“Each contract should be considered separately to determine its

material terms.”).

      Here, the evidence shows that Superbag and Sanchez agreed that they would

resolve their disputes concerning workplace injuries in arbitration. The parties do

not dispute that Sanchez’s claims fall within the scope of that arbitration

agreement. See Sherer, 548 F.3d at 381. Sanchez, however, contends that the

“Mutual Agreement to Arbitrate Claims” and the undated acknowledgment of

receipt of “Arbitration Policy and Procedure” create irreconcilable terms that

preclude a meeting of the minds. He points to differing terms that describe the

                                         9
designated arbitral body, the number of arbitrators that would decide the case, and

the availability of pre-arbitration mediation and post-arbitration appeal.

      The mutual agreement to arbitrate is attached to the SPD. It explains: “The

effective date of this Mutual Agreement to Arbitrate Claims . . . is 09/01/05. If the

Claimant receives notification prior to beginning to work in the Company, the

commencement of work in the Company shall constitute an acceptance of the

terms and conditions of this Agreement.” The acknowledgment Sanchez signed

reiterates that the mutual agreement to arbitrate claims applies to disputes arising

“on or after 09/01/05.” (Emphasis in original.)         The arbitration policy and

procedure, in contrast, is silent concerning the date of its implementation, and,

although Sanchez acknowledged it, he did not receive the policy at the time of

hiring, because it had been superseded by the mutual agreement to arbitrate. The

mutual agreement alone contains a provision addressing its effective date. Under

rules of contract construction, absent other evidence, the more specific provision

denoting the applicable date controls, and thus it determines which document

governs the arbitration proceedings. See CM Asfahl Agency v. Tensor, Inc., 135

S.W.3d 768, 782 (Tex. App.—Houston [1st Dist.] 2004, no pet.); cf. Forbau v.

Aetna Life Ins. Co., 876 S.W.2d 132, 133–34 (Tex. 1994) (“For example, when a

contract provision makes a general statement of coverage, and another provision

specifically states the time limit for such coverage, the more specific provision will

                                          10
control.”).2   We hold that the parties reached an agreement that they would

arbitrate any dispute arising out Sanchez’s on-the-job injuries; and the two signed

documents do not create an irreconcilable conflict as to which arbitration

procedure governs, because one is effective as of a date certain.

      B. Fraud and procedural unconscionability

      By signing the acknowledgment, Sanchez received notice of the mutual

agreement to arbitrate claims. See In re Peterbilt Ltd., L.L.P., 196 S.W.3d 161,

163 (Tex. 2006).    Superbag correctly observes that the Texas Supreme Court’s

decision in Peterbilt is dispositive of Sanchez’s fraudulent inducement claim that

he never received a copy of the agreement to arbitrate. See id. (holding that,

despite employee’s contention that he did not receive employer’s “Summary Plan

Description of Mutual Agreement to Arbitrate Claims,” signed acknowledgment

that he “received and carefully read or been given the opportunity to read”

summary constituted effective notice and unequivocally made employee aware of

arbitration agreement); see also In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005)

(“Absent fraud, misrepresentation, or deceit, a party is bound by the terms of the

contract he signed, regardless of whether he read it or thought it had different

terms.”).


2
      We further note that Sanchez neither reviewed nor had access to the defunct
      arbitration policy at the time of hire.

                                         11
      Sanchez also challenges the enforcement of the arbitration agreement under

section 406.033 of the Texas Labor Code, which limits an employer’s ability to

obtain contractual waivers of claims. See TEX. LAB. CODE ANN. § 406.033(e)–(f)

(rendering invalid pre-injury waiver of cause of action or right by employee of

nonsubscriber). Section 406.033 is inapplicable; the agreement requires only that

Sanchez try his claims in an arbitral forum, not that he waive them.           “An

arbitration agreement covering statutory claims is valid so long as ‘the arbitration

agreement does not waive substantive rights and remedies of the statute and the

arbitration procedures are fair so that the employee may effectively vindicate his

statutory rights.’” In re Poly-Am., LP, 262 S.W.3d 337, 349, 352 (Tex. 2008)

(quoting In re Halliburton Co., 80 S.W.3d 566, 572 (Tex. 2002)).

      Finally, Sanchez argues that the arbitration agreement is procedurally

unconscionable. “[T]he basic test for unconscionability is whether, given the

parties’ general commercial background and the commercial needs of the

particular trade or case, the clause involved is so one-sided that it is

unconscionable under the circumstances existing when the parties made the

contract.” In re FirstMerit Bank, N.A., 52 S.W.3d 749, 757 (Tex. 2001) (citing

TEX. BUS. & COM. CODE ANN. § 2.302 cmt. 1). “The principle is one of preventing

oppression and unfair surprise and not of disturbing allocation of risks because of

superior bargaining power.” Id. Procedural unconscionability refers to the fairness

                                        12
of the circumstances surrounding adoption of the arbitration provision.       In re

Halliburton, 80 S.W.3d 566, 571 (Tex. 2002). The few cases in which courts have

found procedural unconscionability involve situations in which one of the parties

was incapable of understanding the agreement without assistance, and the other

party did not provide that assistance. See In re Turner Bros. Trucking Co., 8

S.W.3d 370, 377 (Tex. App.—Texarkana 1999, orig. proceeding [mand. denied])

(holding that employee did not knowingly consent to contract to compel arbitration

of personal injury claim where record showed that employee was functionally

illiterate, other workers who presented employee with documents containing

arbitration agreement did not themselves understand agreement, and no one else

explained document to employee); Prevot v. Phillips Petroleum Co., 133 F. Supp.

2d 937, 940–41 (S.D. Tex. 2001) (holding that plaintiffs were not bound to

arbitration agreement due to procedural unconscionability where plaintiffs did not

speak or read English and agreement was not translated or explained to them).

Superbag supplied Spanish versions of its policies to its prospective employees,

including Sanchez.      Notably, Sanchez signed the Spanish versions of the

agreements. Nothing in the record shows that Superbag rebuffed any attempt by

Sanchez to obtain more information. A suggestion that Sanchez would not have

agreed to the arbitration policy had he better understood it, without more, does not

demonstrate procedural unconscionability. See In re Palm Harbor Homes, Inc.,

                                        13
195 S.W.3d 672, 679 (Tex. 2006) (rejecting employees’ claim that “they did not

voluntarily waive their rights to a jury trial and that they are unsophisticated

persons who, if the concept of arbitration had been explained to them, would not

have signed the arbitration agreements” as basis for invalidating arbitration

agreement).    We hold that Sanchez failed to satisfy his burden to overcome the

FAA’s strong presumption favoring arbitration; accordingly, the trial court erred in

denying the motion to compel arbitration.

                                    Conclusion

      We reverse the trial court’s order and remand for entry of an order

compelling arbitration and abating the proceedings in the trial court.




                                              Jane Bland
                                              Justice

Panel consists of Chief Justice Radack and Justices Bland and Huddle.




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