Case: 23-20120 Document: 66-1 Page: 1 Date Filed: 05/28/2024
United States Court of Appeals
for the Fifth Circuit
____________ United States Court of Appeals
Fifth Circuit
No. 23-20120
FILED
May 28, 2024
____________
Lyle W. Cayce
Joseph Work, Clerk
Plaintiff—Appellee,
versus
Intertek Resource Solutions, Incorporated,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:22-CV-2960
______________________________
Before Richman, Chief Judge, and Graves and Wilson, Circuit
Judges.
James E. Graves, Jr., Circuit Judge:
Joseph Work and Intertek consent to arbitration. The issue on appeal
is whether the agreed upon Arbitration Agreement provides for individual
arbitration or class arbitration. The district court held that because the
Arbitration Agreement incorporated the JAMS 1 Rules by reference, the
_____________________
1
At its founding in 1979, JAMS was an acronym for Judicial Arbitration and
Mediation Services, Inc. The organization was comprised of a panel of retired judges.
JAMS, http://www.jamsadr.com (last visited May 10, 2024)
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No. 23-20120
arbitration should be administered by JAMS Employment Arbitration Rules
and Procedures and the JAMS Policy on Employment Arbitration Minimum
Standards of Procedural Fairness. Additionally, the district court held that
the referenced JAMS Rules delegate questions of arbitrability to the
arbitrator, including whether class arbitration is available. We AFFIRM.
BACKGROUND
Joseph Work filed a putative collective action against Intertek, his
former employer, for unpaid overtime, liquidated damages, attorneys’ fees,
and relief for the collective class. Intertek objected to proceeding in a judicial
forum and requested that Work re-file in arbitration. Both parties consent to
arbitration. The issue on appeal is whether the agreed upon Arbitration
Agreement provides for individual arbitration or class arbitration. Work
seeks class arbitration, and Intertek seeks individual arbitration.
On December 12, 2022, Intertek filed a Motion to Compel Individual
Arbitration. Intertek argued that the Arbitration Agreement did not contain
an express delegation clause and was silent as to class arbitration. On January
3, 2023, Work responded that the Arbitration Agreement incorporated the
JAMS Employment Arbitration Rules and Procedures and the JAMS Policy
on Employment Arbitration Minimum Standards of Procedural Fairness
(collectively, the “JAMS Rules”). The Arbitration Agreement contained the
following language:
Any arbitration required hereunder shall be governed by the
Federal Arbitration Act and administered by JAMS pursuant
to its Employment Arbitration Rules & Procedures and subject
to JAMS Policy on Employment Arbitration Minimum
Standards of Procedural Fairness.
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Work argued that because the Arbitration Agreement incorporated the
JAMS Rules there was “clear and unmistakable” intent, by both parties, to
delegate the question of class arbitrability to the arbitrator.
On January 10, 2023, Intertek filed a response contending that, under
Texas law, “pursuant to” was not sufficient language to incorporate a
referenced document in this instance. Intertek argued that while express
incorporation by reference is sufficient to delegate many issues to the
arbitrator, express incorporation by reference is insufficient to delegate all
issues, particularly the issue of class arbitrability.
On March 16, 2023, the district court issued a Memorandum & Order
ruling that the issue of class arbitrability was delegated to the arbitrator. The
district court held that the Arbitration Agreement did incorporate by
reference certain JAMS Rules. Additionally, the district court held that the
JAMS Rules delegate questions of arbitrability to the arbitrator, which
includes the question of class arbitrability. The district court granted Work’s
motion to dismiss and denied Intertek’s motion to compel individual
arbitration. This appeal followed.
STANDARD OF REVIEW
A district court’s grant of a motion to compel arbitration is reviewed
de novo. Nelson v. Watch House Intern., L.L.C., 815 F.3d 190, 192 (5th Cir.
2016).
DISCUSSION
On appeal, Intertek makes two arguments. First, consent to class
arbitration is absent, and, therefore, questions of arbitrability should not be
delegated to the arbitrator. Second, the “pursuant to” language in the
Arbitration Agreement is not clear, and the circumstances here do not
indicate intent to incorporate by reference. Both arguments are incorrect
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under federal and state law, respectively.
First, Intertek cites Lamps Plus, Inc. v. Varela, 587 U.S. 176 (2019), to
support its contention that consent to class arbitration is absent here, and,
therefore, questions of arbitrability should not be delegated to the arbitrator.
In Lamps Plus, the Supreme Court held that “an ambiguous agreement”
cannot provide a “contractual basis for compelling arbitration.”
Id. at 183;
see also Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,
559 U.S. 662, 686 (2010).
If an agreement is ambiguous, “there is reason to doubt the parties’ mutual
consent to resolve disputes through classwide arbitration.” Lamps Plus,
587
U.S. at 185. “[C]ourts may not infer consent to participate in class arbitration
absent an affirmative contractual basis for concluding that the party agreed to
do so. Silence is not enough; the [Federal Arbitration Act] requires more.”
Id. (internal quotations omitted) (cleaned up). But because the Arbitration
Agreement at issue here is not ambiguous, Lamps Plus does not apply.
Second, Intertek argues that the “pursuant to” language in the
Arbitration Agreement is not clear and the circumstances do not indicate an
intent to incorporate by reference. “Under Texas law, [a] written contract
must be construed to give effect to the parties’ intent expressed in the text as
understood in light of the facts and circumstances surrounding the contract’s
execution.” Al Rushaid v. Nat’l Oilwell Varco, Inc., 757 F.3d 416, 419 (5th Cir.
2014) (quotation omitted). “Courts should give contract terms their plain
and ordinary meaning unless the instrument indicates the parties intended a
different meaning.”
Id. (quotations omitted). Again, the Arbitration
Agreement includes the following language:
Any arbitration required hereunder shall be governed by the
Federal Arbitration Act and administered by JAMS pursuant to
its Employment Arbitration Rules & Procedures and subject to
JAMS Policy on Employment Arbitration Minimum Standards
of Procedural Fairness.
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(emphasis added). Both parties agreed to this clause. It unequivocally
incorporates the JAMS Rules. The instrument does not indicate differently,
and the writing plainly refers to the JAMS Rules. Furthermore, the reference
to the JAMS rules is clear and the circumstances indicate the parties’ intent
to incorporate. Thus, the district court did not err.
This court recently held that that incorporating language from the
JAMS Rules demonstrates a clear and unmistakable intent to arbitrate
arbitrability. Cooper v. WestEnd Cap. Mgmt., L.L.C., 832 F.3d 534 (5th Cir.
2016). In Cooper, the court examined a version of Rule 11(b) from the JAMS
Comprehensive Arbitration Rules & Procedures, which is substantively
identical to JAMS Employment Rule 11(b). After finding that the parties
“expressly adopted the JAMS Rules in the [arbitration agreement],” the
court concluded “[t]he express adoption of these rules presents clear and
unmistakable evidence that the parties agreed to arbitrate arbitrability.”
Id.
at 546 (emphasis added) (quoting Petrofac, Inc. v. DynMcDermott Petroleum
Operations Co.,
687 F.3d 671, 675 (5th Cir. 2012)).
Following Cooper, the Arbitration Agreement here clearly
incorporates the JAMS Rules by reference. JAMS Employment Arbitration
Rules and Procedures provide, “[j]urisdictional and arbitrability disputes,
including disputes over the . . . interpretation or scope of the agreement under
which Arbitration is sought, and who are proper Parties to the Arbitration,
shall be submitted to and ruled on by the Arbitrator.” JAMS Employment
Rule 11(b). The language in this rule is “clear and unmistakable” and
unequivocally delegates the question of arbitrability to the arbitrator, not the
court. See 20/20 Communications, Inc. v. Crawford, 930 F.3d 715, 718 (5th Cir.
2019).
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Because the language in the Arbitration Agreement is “clear and
unmistakable” in its incorporation of the JAMS Rules, which provide that
the arbitrator decides the question of arbitrability, we AFFIRM.
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