In our last column, we analyzed the most recent court decisions from the U.S. Supreme Court, the Federal Circuit Courts of Appeal and the State of California regarding the enforceability of consumer and employment arbitration agreements. Texas jurisprudence on arbitration law is robust and independent. Here, we list five things that you should know about Texas arbitration law in case you find yourself negotiating an arbitration clause with a Texas choice of law provision.
When an issue is pending in both arbitration and litigation, Texas recognizes that the Federal Arbitration Act generally requires the arbitration to first proceed. In In re Merrill Lynch & Co, Inc., two subsidiaries of the same company launched identical claims against an investment company. One had an arbitration agreement while the other did not. The Texas Supreme Court abated the litigation to ensure that the arbitration agreement had priority over collateral litigation.