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Should an employer shoulder arbitration fees?



AutoNation made no objections to the manager’s evidence and provided no responsive evidence about arbitration costs.

Fees feared by manager are speculative

The trial court denied AutoNation’s motion to compel arbitration. The court of appeals affirmed this decision. It did not answer the question of whether the manager signed the arbitration agreement but found that the agreement was unconscionable since he would likely have to pay prohibitive arbitration costs.

In the case of Houston AN USA, LLC d/b/a AutoNation USA Houston v. Walter Shattenkirk, the Texas Supreme Court reversed the judgment finding the arbitration agreement unconscionable. It returned the case to the appellate court to address the issue of whether the manager signed the agreement.

“A court may not nullify an otherwise valid agreement to arbitrate based on purely speculative assumptions about the burdens of compelling arbitration,” wrote Justice Debra Lehrmann for the Supreme Court.

The evidence provided by the manager failed to show that he would actually have to incur excessive arbitration fees that would prevent him from effectively advancing his rights through arbitration, the Supreme Court said.

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