5 things to know about Texas arbitration law

Helpful tips for negotiating an arbitration clause with a Texas choice of law provision

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.

 

3. In Texas, arbitration trumps related litigation and serves as a pause button to that litigation

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.

Contributing Author

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Alan Dabdoub

Alan Dabdoub represents corporate clients in business litigation, including business torts, class actions and employment disputes.  He has first chaired several trials and arbitrations in...

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Contributing Author

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Trey Cox

Trey Cox has been helping clients resolve complex business disputes for nearly 20 years, representing Fortune 500 corporations, entrepreneurs and leading firms in a wide...

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