Valdes v. Whataburger Rests., LLC, 14-16-00222-CV

OMAR VALDES, Appellant v. WHATABURGER RESTAURANTS, LLC, Appellee

NO. 14-16-00222-CV

State of Texas in the Fourteenth Court of Appeals

June 15, 2017

On Appeal from the 55th District Court Harris County, Texas

Trial Court Cause No. 2015-57179

MEMORANDUM OPINION

Appellant Omar Valdes appeals from an order confirming an arbitration award against him on his claims of sex discrimination and retaliation arising from the termination of his employment from appellee, Whataburger Restaurants, LLC. Following his termination, Valdes initiated an arbitration proceeding under the Federal Arbitration Act. The arbitrator rejected his claims on the merits and ruled in Whataburger's favor. Valdes filed a motion to vacate the award, and Whataburger filed a motion to confirm it. The trial court granted Whataburger's motion to confirm and signed a final judgment accordingly. On appeal, Valdes contends the trial court erred in denying his motion to vacate the award. Concluding we lack authority to review some of his challenges and lack an adequate record to rule on others, we affirm the judgment.

Background

Whataburger hired Valdes as a team member in 2013.¹ His duties included operating the cash register. In March 2014, Valdes began a shift without counting his register's cash drawer. His failure to do so contravened his supervisor's instructions to count the cash drawer before logging into the computer system, which was part of Whataburger's cash-handling policy.² Later during his shift, after transacting business with customers, he notified his supervisor that he had not verified his cash drawer at the beginning of his shift. Upon counting the drawer, it was determined to be twenty dollars short. This discrepancy required a written warning to Valdes. As a result, Valdes became upset, yelled an obscenity at his supervisor,³ and "stormed" out of the restaurant while stating that he would not return. Other employees and customers witnessed Valdes's outburst.

After learning of Valdes's behavior, the restaurant's general manager decided he wanted to terminate Valdes, but discussed the matter with his area manager before reaching a final determination. The area manager agreed Valdesshould be terminated. Whataburger notified Valdes that he was terminated five days after the incident. The restaurant's general manager, who hired Valdes initially, testified that Valdes's gender—male—had nothing to do with the termination decision.

After filing a complaint with the Equal Employment Opportunity Commission and receiving a right to sue letter, Valdes initiated an arbitration proceeding under the Federal Arbitration Act (the "FAA"). The parties agree that the FAA applies to this dispute. Valdes asserted claims of sex discrimination and retaliation arising out of the decision to terminate his employment. As to the sex discrimination claim, the arbitrator ruled that Valdes failed to prove a prima facie case because he did not present evidence that he was qualified for his position or that female employees situated similarly to him were treated more favorably for similar infractions with respect to both the cash-handling and anti-profanity policies. Regarding the retaliation claim, the arbitrator ruled that, assuming Valdes engaged in a protected activity, Valdes did not show that the decision-makers knew that he had engaged in a protected activity before deciding to terminate his employment. The arbitrator signed an award denying all of Valdes's claims and assessing all costs and expenses of the arbitration proceeding against Whataburger.

Valdes filed a motion to vacate, modify, and correct the award in district court, and Whataburger filed a motion to confirm. The trial court conducted a hearing on both motions; however, there is no record of that hearing before us.⁴ While Valdes filed several documents with the district clerk just prior to the hearing, the record does not show that Valdes offered them into evidence or that the trial court admitted these documents into evidence during the hearing.Whataburger disputes that these documents are properly included as part of the appellate record. Following the hearing, the trial court signed a final judgment confirming the arbitrator's award. Valdes filed a motion to reconsider, which the trial court denied. Valdes appeals, arguing that the trial court should have vacated the award for several reasons, which we discuss below.

Standard of Review

We review de novo a trial court's decision to confirm or vacate an arbitration award. D.R. Horton-Tex., Ltd. v. Bernhard, 423 S.W.3d 532, 534 (Tex. App.—Houston [14th Dist.] 2014, pet. denied); Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., 105 S.W.3d 244, 250 (Tex. App.—Houston [14th Dist.] 2003, pet. denied); see also In re Chestnut Energy Partners, Inc., 300 S.W.3d 386, 397 (Tex. App.—Dallas 2009, pet. denied); Rain CII Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469, 472 (5th Cir. 2012).

Law Applicable to Vacating Arbitration Awards

Review of an arbitration award is "extraordinarily narrow"⁵ and "exceedingly deferential."⁶ Arbitration awards have the same effect as a judgment of last resort and, consistent with the deferential and narrow scope of review, we indulge every reasonable presumption in favor of the award and none against it. See CVN Grp., Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002); Amoco D.T. Co., 343 S.W.3d at 841. We review a challenge to an arbitration award under a "heavy presumption" in favor of confirming the award. Stage Stores, Inc. v. Gunnerson, 477 S.W.3d 848, 855 (Tex. App.—Houston [1st Dist.] 2015, no pet.); see also CatCharter, LLC v. Schurtenberger, 646 F.3d 836, 842 (11th Cir. 2011); Brook v. Peak Int'l, Ltd., 294 F.3d 668, 672 (5th Cir. 2002).

Under the FAA, an arbitration award must be confirmed unless it is vacated, modified, or corrected under specifically enumerated statutory grounds. See 9 U.S.C. §§ 9-11; Amoco D.T. Co., 343 S.W.3d at 841. The grounds for which a trial court may vacate an arbitration award are notably limited to those expressly identified in the statute, to the exclusion of all other potential grounds. See Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008) (statutory grounds provided in sections 10 and 11 of the FAA for vacating, modifying, or correcting an arbitration award are exclusive); Rain CII Carbon, 674 F.3d at 472. Section 10(a) of the FAA provides that a trial court may vacate an arbitration award for any one of the following reasons:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10(a)(1)-(4).

A party seeking vacatur under the FAA bears a heavy burden to prove one of these statutorily enumerated grounds, which includes the burden to present a complete record establishing the reason or reasons for vacatur. See Amoco D.T. Co., 343 S.W.3d at 841; Williams, 244 S.W.3d at 568; Anzilotti v. Gene D. Liggin,Inc., 899 S.W.2d 264, 267 (Tex. App.—Houston [14th Dist.] 1995, no writ). Without a record of the arbitration proceedings, for example, we presume adequate support for the arbitration award. Barton v. Fashion Glass & Mirror, Ltd., 321 S.W.3d 641, 645 n.2 (Tex. App.—Houston [14th Dist.] 2010, no pet.); see Jamison & Harris v. Nat'l Loan Inv'rs, 939 S.W.2d 735, 737 (Tex. App.—Houston [14th Dist.] 1997, writ denied); Anzilotti, 899 S.W.2d at 267. More so, we have held that without a complete record of the evidence presented to the arbitrator during the arbitration proceedings, there can be no appellate review of alleged misbehavior by the arbitrator or a failure to hear evidence under the third ground. Jamison & Harris, 939 S.W.2d at 737 ("Without a record of the arbitration proceedings, we are unable to determine what evidence the arbitrator refused to hear or what evidence was offered before the arbitrator."). Even when a complete record of the arbitration proceedings is available on appeal, relief will not necessarily lie when an arbitrator commits an error—even a serious error. See Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2068 (2013); Stage Stores, 477 S.W.3d at 855. With the above framework in mind, we turn to Valdes's issues.

Analysis

A. Issues

Valdes's brief contains a statement of issues, which includes quotations taken from the statutory text under 9 U.S.C. sections 10(a)(3) and 10(a)(4). For example, Valdes asserts that the arbitrator "engaged in misconduct in effectively refusing to hear evidence pertinent and material"; "engaged in misbehavior by which [Valdes's rights] have been prejudiced"; and "exceeded his powers, or so imperfectly executed them, that a mutual, final, and definite award upon the subject matter submitted was not made." He also asserts that the arbitrator "acted in manifest disregard of the laws governing" the FAA.

To the extent Valdes's brief refers to the statutory grounds for vacatur, however, his references to those sections in his statement of issues are conclusory. A review of the substance of his brief reveals that he is complaining of matters largely falling outside the permissible scope of the trial court's authority to vacate an award, or our appellate review of a confirmation ruling. We can reduce his contentions to three essential categories of argument: (1) evidentiary sufficiency complaints, including that the arbitrator misinterpreted the evidence; (2) discovery complaints based almost exclusively on the premise that the arbitrator refused to compel production...