Wal-Mart Stores Texas, LLC v. Tony Peavley

• Court: Court of Appeals of Texas
• Decided: February 9, 2023
• Docket: 09-21-00403-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

________________

NO. 09-21-00403-CV ________________

WAL-MART STORES TEXAS, LLC, Appellant

V.

TONY PEAVLEY, Appellee ________________________________________________________________________

On Appeal from the 163rd District Court Orange County, Texas Trial Cause No. B210209-C ________________________________________________________________________

MEMORANDUM OPINION

Wal-Mart Stores Texas, LLC (“Walmart Texas”) appeals the trial court’s

Order Denying its Motion to Compel Arbitration and Stay Litigation in a suit

asserting a negligence claim brought by its employee, Tony Peavley. 1, 2 In four

issues, Walmart Texas asks whether: 1) the Federal Arbitration Act applies to the

1Appellee’s name is Tony Peavley, but the lawsuit incorrectly named him as “Tony Peazley.” We refer to him by his correct name in this opinion. 2We may consider this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code

Ann. §§ 51.016, 171.098(a)(1) (permitting interlocutory appeal from an order denying motion to compel arbitration). 1 arbitration agreement; 2) Walmart met its burden to show the parties’ arbitration

agreement was a valid agreement to arbitrate between Peavley and Walmart, or that

Peavley ratified and accepted the arbitration agreement by accepting benefits under

Walmart Texas’s Injury Care Benefit Plan; 3) Walmart met its burden to show that

Peavley’s claims fell under the scope of the arbitration agreement; and 4) Peavley

asserted any viable affirmative defense to the arbitration agreement’s enforcement

or met his evidentiary burden to establish a viable defense to enforcement. As set

forth below, we will reverse the trial court’s Order Denying Walmart Texas’s

Motion to Compel Arbitration and Stay Litigation and remand for further

proceedings consistent with this opinion.

Background

Peavley has been a Walmart Texas employee (or “associate”) since 2017. He

allegedly sustained injuries in the course and scope of his employment while moving

pallets of water and subsequently sued Walmart Texas for negligence. Walmart

Texas answered and demanded arbitration by asserting there was a valid, enforceable

arbitration agreement. Walmart Texas is a non-subscriber to workers’ compensation

insurance and instead, adopted its Texas Injury Care Benefit Plan as of 2012 (“2012

Plan”) in lieu of workers’ compensation insurance for associates who sustained

injuries in the course and scope of their employment.

On July 1, 2017, the 2012 Plan was amended and restated in Walmart Texas’s

current Texas Injury Care Benefit Plan (the “Plan”). Walmart Inc. (formerly known 2 as Walmart Stores, Inc.) is the Plan Sponsor, and Walmart Texas is a participating

employer in the Plan. The Plan provides specific benefits for employees, including

payments for medical expenses and wage replacement, in the event of injury, work-

related illness, death, or dismemberment. Appendix A of the Plan is titled

“ARBITRATION OF CERTAIN INJURY-RELATED DISPUTES” (the

“Arbitration Agreement”).

Under the Arbitration Agreement, binding arbitration is the sole and exclusive

remedy for resolving any covered claim or dispute between Walmart Texas and an

associate. In other words, neither the associate nor Walmart Texas shall be entitled

to a bench or jury trial on any claim covered by the Arbitration Agreement. “Covered

claims” include “any legal or equitable claim by or with respect to an Associate for

any form of physical or psychological damage, harm, or death which relates to an

accident, occupational disease, or cumulative trauma.” “Covered claims” also

include “[t]he determination of whether a claim is covered by this [Arbitration

Agreement].” The Arbitration Agreement states that “This Policy applies to each

Associate and Employer without regard to whether they have completed and signed

a Receipt, Safety Pledge, and Arbitration Acknowledgement form or similar written

receipt.” It further provides that this policy for resolving claims by arbitration is

equally binding on the employer and the associate. Finally, if either Walmart Texas

or the associate files a claim covered by the Arbitration Agreement “…by any means

other than arbitration, the responding party shall be entitled to dismissal of such 3 action, and the recovery of all costs and attorney’s fees and expenses related to such

action.”

Peavley concedes he completed a computer-based learning (“CBL”) program

online. In that CBL, Peavley was required to complete various modules and click

acknowledgments that were required before moving on. Peavley did so, and one of

the required CBL modules included an acknowledgment of the Arbitration

Agreement, which required him to click an “I Understand” button to complete. After

reviewing the information in the CBL module, it advised Peavley to click on a link

containing the Plan and read it, which contained the Arbitration Agreement as

Appendix A, among other things. Peavley did so, then to complete the CBL module,

he had to click the “I Understand” button. The section informs the associate that by

clicking the “I Understand” button, the associate is completing the course and

acknowledging: 1) that the associate “read and [understood] the Arbitration

Acknowledgement and Policy;” (2) that the associate understands his or her rights

and obligations under the Plan; and (3) that the associate’s training record will be

updated to show that the associate has successfully completed the course. Peavley

completed these CBL training modules on three occasions – in September 2017,

February 2019, and May 19, 2020, the last of which was eight days before his alleged

on the job injury.

Walmart Texas filed its Motion to Compel Arbitration and Stay Litigation and

supported the Motion to Compel with the following evidence: CBL Module; the Plan 4 including the Arbitration Agreement and Acknowledgment; Peavley’s CBL Record;

and Senior Manager of Regional Risk Management Tim Osmond’s Affidavit, which

outlines the CBL procedures and that Walmart Texas maintains records showing

Peavley completed the training module by accessing the module with his

confidential associate identifier and password based on the training records that

Walmart Texas retains.

Osmond authenticated the documents attached to the Motion to Compel,

including the Plan CBL module as Exhibit “A.” Osmond averred that within that

CBL module, there is a “Mandatory Arbitration Process” section and a section titled

“Summary Plan Description” and associates “must click the link to the Plan and

review it before continuing.” Walmart Texas attached a copy of its Summary Plan,

which contained the “Arbitration of Certain Injury-Related Disputes” as “Appendix

A.” Osmond explained the Acknowledgements contained an express declaration that

the associate was acknowledging by clicking the “I Understand” button he had read

and understood the “Arbitration Acknowledgment and Policy.” Osmond averred

Walmart Texas’s training records showed that Peavley completed the CBL modules

for the Plan and that the Plan, including the Summary Plan Description with

Appendix A, was provided to Peavley through CBL training as a part of his

employment. Osmond further averred that Peavley’s training records show Peavley

followed the described process to complete the Plan CBL and show that he

5 acknowledged he read and understood Appendix A, Arbitration of Certain Injury

Related Disputes.

More importantly and more specifically, Appendix A contains the following

language:

(b) Binding Effect: This Policy for resolving claims by arbitration is equally binding upon, and applies to any such claims that may be brought by, an Employer and each Associate and his/her spouse, children, parents, beneficiaries, Representatives, executors, administrators, guardians, heirs or assigns (including, but not limited to, any survival or wrongful-death claim). This binding arbitration will be the sole and exclusive remedy for resolving any such claim or dispute. (1) This Policy applies to each Associate and the Employer without regard to whether they have completed and signed a Receipt, Safety Pledge and Arbitration Acknowledgement form or similar written receipt. Adequate consideration for this Policy is represented by, among other things, eligibility for (and not necessarily any receipt of) benefits under this Plan and the fact that it is mutually binding on both the Employer and Associates. Any actual payment of benefits under this Plan to or with respect to an Associate shall serve as further consideration for and represent the further agreement of such Associate to the provisions of this Policy. This Policy shall remain in effect with respect to the Employer and all Associates, without regard to any Associate refusal of benefits under this Plan, return of benefit payments under this Plan to an Employer, ineligibility for or cessation of benefits under this Plan in accordance with its terms, or any voluntary or involuntary termination of an Associate’s employment with an Employer.

Peavley responded to the Motion to Compel Arbitration and argued that no

valid agreement to arbitrate exists because he did not agree to arbitrate. In support

of his response, Peavley provided an affidavit averring that

6 I have never agreed to or otherwise consented to any arbitration agreement to my knowledge. I never signed an arbitration agreement in person or electronically, or otherwise. It was never explained to me that by clicking the ‘I understand’ button at the end of my training module that I was creating contractual obligations for myself, or any other party. Upon completing the course, the only option I had was to select ‘I understand’ as that was the only button I could choose.

Peavley objected to Osmond’s affidavit on the basis that Osmond lacked personal

knowledge but failed to obtain rulings on these objections. Walmart Texas also filed

Objections to Plaintiff’s Affidavit and Reply to Plaintiff’s Response to Defendant’s

Motion to Compel Arbitration and Stay Litigation and attached a copy of Peavley’s

recorded statement, where he acknowledged completing the CBLs. The trial court

overruled Walmart Texas’s objections to Peavley’s affidavit and denied the Motion

to Compel Arbitration and Stay Litigation.

Standard of Review

“[A] party seeking to compel arbitration must establish the existence of a valid

arbitration agreement and show that the disputed claims fall within the scope of that

agreement.” Wagner v. Apache Corp., 627 S.W.3d 277, 282 (Tex. 2021) (citing In

re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005)). We review a trial

court’s order denying a motion to compel arbitration for an abuse of discretion.

Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). We defer to the trial

court’s factual determinations if they are supported by evidence but review its legal

determinations de novo. Id.; see also Aerotek, Inc. v. Boyd, 624 S.W.3d 199, 204

(Tex. 2021) (noting deference to factual determinations if they are supported by 7 evidence). Whether the disputed claims fall within the scope of a valid arbitration

agreement is a question of law, which we review de novo. See Henry, 551 S.W.3d

at 115; In re Labatt Food Serv., L.P., 279 S.W.3d 640, 642–43 (Tex. 2009).

Analysis

In his brief, Peavley concedes jurisdiction and does not dispute the scope of

the agreement. Rather, citing his own affidavit testimony, he contests the existence

of an agreement to arbitrate, arguing that the evidence at trial created a fact issue as

to whether he agreed to arbitrate in the absence of a signature and “that he had no

such notice and agreed to no such thing.” Accordingly, we turn to issues two and

four: whether Walmart Texas met its burden to show there was a valid agreement to

arbitrate between it and Peavley; and whether Peavley asserted any viable

affirmative defense to the arbitration agreement’s enforcement or met his evidentiary

burden to establish a viable defense to enforcement.

To compel arbitration, a party must prove that a valid arbitration agreement

exists. Aerotek, 624 S.W.3d at 204; Henry, 551 S.W.3d at 115 (citation omitted). In

order for the Arbitration Agreement to be valid, Peavley must have consented to it.

See Aerotek, 624 S.W.3d at 204 (citation omitted). Peavley does not contest that he

completed the CBL module, instead he argues that there is no valid Arbitration

Agreement because he did not receive notice or agree to the provision. Peavley’s

argument is like that of the employees attempting to avoid the arbitration provision

in Aerotek, which the Texas Supreme Court rejected. See id. 8 “An electronic record or electronic signature is attributable to a person if it

was the act of the person. The act of the person may be shown in any manner,

including a showing of the efficacy of any security procedure applied to determine

the person to which the electronic record or electronic signature was attributable.”

Tex. Bus. & Comm. Code Ann. § 322.009(a); see also Aerotek, 624 S.W.3d at 205–

06 (discussing same). The Aerotek Court explained that a

security procedure[] may include requiring personal identifying information—such as a social security number or an address—to register for an account; assigning a unique identifier to a user and then tying that identifier to the user’s actions; maintaining a single, secure system for tracking user activities that prevents unauthorized access to electronic records; business rules that require users to complete all steps in a program before moving on or completing it; and timestamps showing when users completed certain actions.

Id. at 205–06 (internal citations omitted). These examples of security procedures are

non-exclusive. Id. at 206.

Walmart Texas provided evidence in the form of Osmond’s affidavit.

Osmond’s affidavit established and the evidence Walmart Texas attached to its

motion established that Peavley completed the training modules at a Walmart

location and accessed the modules by entering his confidential associate

identification number and password. Osmond explained that once a module is

completed, an electronic training record is retained showing the date of completion,

9 status of completion, and score if a test was required.3 Osmond further averred that

within the Plan CBL module, the associates must click the link to the Plan and review

it before they can continue. “Within the Summary Plan Description that the

Associate must click on to review before continuing to the next page is Appendix A

titled ‘Arbitration of Certain Injury Related Disputes,’ which thoroughly describes

the arbitration program.” Finally, in the “Acknowledgment of Completion” section

of the CBL, by clicking “I Understand” the participant acknowledged that he read

and understood the Arbitration Acknowledgment and Policy. Peavley does not

dispute that he completed the CBL module at issue or that he received benefits under

the plan. Peavley’s simple denial that he did not “agree” and did not have “notice”

constituted no evidence. See Aerotek at 209. Peavley could not have completed the

CBL without acknowledging and consenting to the Arbitration Agreement. See id.

In other words, the evidence conclusively shows Peavley, by clicking the button,

acknowledged he understood the Arbitration Agreement and that is sufficient to

show he agreed to the terms in what the document says.

3On appeal, Peavley complains that Osmond’s affidavit lacks personal knowledge, which is a defect of form. Although he objected to Osmond’s affidavit in the trial court, Peavley failed to obtain rulings on those objections and has waived them. See Stewart v. Sanmina Tex. L.P., 156 S.W.3d 198, 207 (Tex. App.—Dallas 2005, no pet.) (stating lack of personal knowledge is a defect of form). Because Peavley failed to obtain a ruling on his objections as to lack of personal knowledge in the trial court, he cannot raise these objections on appeal. See id. 10 An employer may enforce an arbitration agreement entered into during an at-

will employment relationship if the employee received notice of the arbitration

policy and accepted it. In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d 161, 163

(Tex. 2006); In re Halliburton Co., 80 S.W.3d 566, 568 (Tex. 2002). In Dallas

Peterbilt, the employee argued that despite signing an acknowledgment form of a

summary, he did not have notice because he never received the actual Mutual

Agreement to Arbitrate Claims. See 196 S.W.3d at 162. Likewise, in Halliburton,

the employee received a one-page summary of the agreement to arbitrate. See 80

S.W.3d at 568–69. In essence, both the employees in each case argued that only the

underlying agreements themselves could provide notice. Rejecting these arguments,

the Texas Supreme Court explained that in determining whether an employee

received notice of a binding arbitration agreement, the “cases do not confine that

‘notice analysis’ to the underlying agreement, but to all communications between

the employer and employee.” In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d at 162

(citations omitted). Although a summary of such an arbitration policy could be

sufficient to place one on notice, the evidence here goes a step further and establishes

that Peavley received the actual policy as Appendix A to the Summary Plan

Description.

Peavley contests that he received notice of the arbitration policy; however, his

argument lacks merit since he does not dispute completing the CBL and clicking the

button that states “I Understand.” By clicking that button, the language in the module 11 reflects that Peavley expressly acknowledged he had read and understood the

agreement that required him to arbitrate injury-related disputes. Appendix A states

the policy is binding on Walmart and Peavley, and the fact Peavley accepted benefits

under the Plan serves “as further consideration for and represent[ed] the further

agreement” that Peavley agreed to the terms in the Plan. We conclude Peavley had

notice of the Arbitration Agreement both before his injury occurred and before he

accepted benefits under the Plan. See id. at 163 (finding the employer’s summary

constituted effective notice since it unequivocally provided the employee with

knowledge of the arbitration agreement); In re Halliburton Co., 80 S.W.3d at 569

(holding that a notice and summary given to the employee was unequivocal notice).

“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.” In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d at 163 (citation omitted).

Walmart Texas’s evidence established that Peavley received notice of the arbitration

policy when he completed the CBL modules on three separate occasions and

continued to work for Walmart Texas after receiving notice. Furthermore, Peavley

accepted the terms of the Arbitration Agreement. Due to the above, we further

conclude Peavley agreed to arbitrate his on-the-job injury claim against Walmart

Texas as a matter of law. 4 See id.

4Also of note, our sister court in Dallas held the same Arbitration Agreement was valid and enforceable where another Walmart employee completed the online 12 We conclude that Walmart Texas met its burden of showing the existence of

a valid agreement to arbitrate between it and Peavley. We sustain issue two.

Since Walmart Texas met its burden of establishing the existence of a valid

arbitration agreement and Peavley does not dispute that the claims fall within the

scope of that agreement, the burden shifted to Peavley to prove an affirmative

defense to enforcing the agreement. See Henry, 551 S.W.3d at 115 (citations

omitted). Peavley failed to plead any affirmative defense to enforcement, and we

have already explained that his affidavit denying he agreed or consented to arbitrate

claims with his employer did not create a fact issue on whether he was bound to

resolve his dispute with Walmart Texas under the arbitration agreement in the Plan.

See Aerotek, 624 S.W.3d at 210. Accordingly, Peavley failed to meet his burden of

establishing a viable affirmative defense to the Arbitration Agreement’s

enforcement. We sustain issue four.

Conclusion

Since Peavley does not contest jurisdiction or the scope of the Arbitration

Agreement, we overrule issues one and three. As to Walmart Texas’s remaining

CBL modules containing the same materials and acknowledged receiving the arbitration policy. See Wal-Mart Stores, Inc. v. Constantine, No. 05-17-00694-CV, 2018 WL 2001959, at *1, 6–8 (Tex. App.—Dallas Apr. 30, 2018, no pet.) (mem. op.). The plaintiffs there argued that Walmart’s evidence showing the employee completed the Plan CBL module was insufficient to show that he agreed to arbitrate his clam. See id. at *5. There, as here, the employee clicked an “I Understand” button beneath the “Arbitration Acknowledgement.” See id.

13 issues, we conclude Walmart Texas met its burden of showing the parties had a valid

arbitration agreement, established Peavley acknowledged completing the CBL

module, and established that Peavley continued working for Walmart Texas after

receiving notice of the arbitration policy. We further conclude that Peavley failed to

create a fact issue by submitting an affidavit that did nothing more than deny his

agreement or consent. See Aerotek, 624 S.W.3d at 210; In re Dallas Peterbilt, 196

S.W.3d at 163. Consequently, Peavley’s affidavit failed to raise a fact issue showing

he had an affirmative defense to enforcing the Arbitration Agreement.

We reverse the Order Denying Walmart Texas’s Motion to Compel

Arbitration and Stay Litigation and remand the case to the trial court for further

proceedings consistent with this opinion. Tex. R. App. P. 43.2(d).

REVERSED AND REMANDED.

_____________________________ W. SCOTT GOLEMON Chief Justice Submitted on January 19, 2023 Opinion Delivered February 9, 2023

Before Golemon, C.J., Horton and Johnson, JJ.