I’m wondering if anyone can point me to a specific example of duress being used successfully as the basis for avoiding an arbitration agreement.
I’ve seen plenty of examples of cases in which it has been argued unsuccessfully.
And I’ve seen examples of cases in which it was one of a laundry list of grievances, some combination of which caused the court to strike down an arbitration clause. But my sense in each of those cases was that the court was really focused on something else (like unconscionability) as the basis for not enforcing the arbitration agreement.
Can anyone point me to an example of duress, plain and simple?
Michael Moffitt
In 2004, a Texas Appellate Court in Beaumont affirmed a trial court’s decision to refuse to compel arbitration on the basis that the agreement to arbitrate was procured by duress. Rogers v. Maida, 126 S.W.3d 643. In that case, a company asked an employee to agree to an arbitration clause as a condition of future employment (which is ok in Texas). However, when the employee said no, the company withheld previously earned pay until she capitulated. The Court found this to be evidence of duress, since the company had no legal authority to refuse to distrube already-earned pay to the employee.
HOWEVER, several years later, the Texas Supreme Court overruled the trial court and the Court of Appeals, finding that the duress applied to an employment agreement generally, and not to arbitration specifically, and thus the duress question ought to have been left up to the arbitrator. In RE: ALS, 221 S.W.3d 629 (Tex. 2007). We blogged about the reversal when it came down.
Take Care. Rob Hargrove, Austin Texas.