HOUSTON - The 14th Court of Appeals today affirmed the denial of AutoNation USA Houston’s motion to compel arbitration in a discrimination lawsuit, finding that arbitration would not be less expensive than litigation.
The lawsuit was brought by Walter Shattenkrirk, a former AutonNation employee.
Court records show that AutoNation hired Shattenkirk as a general manager in May 2017. In August 2017, Shattenkirk alleged that his superior at the car dealership made racist comments, which he reported. One month later, AutoNation placed Shattenkirk on a Performance Improvement Plan, and subsequently terminated him about two months later.
In turn, Shattenkirk sued AutoNation alleging his termination was due to discrimination and retaliation.
Court records show AutoNation filed a motion to compel arbitration in which it alleged that Shattenkirk entered into a binding arbitration agreement when he accepted employment with AutoNation.
In response, Shattenkirk asserted that the arbitration agreement was not valid because he had not signed it, and, if the agreement was valid, it was unconscionable because the cost of arbitration was so high that it effectively prevented him from asserting his claims.
Court records show the trial court denied AutoNation’s motion to compel arbitration, leading AutoNation to appeal.
Justices found there is no provision in the arbitration agreement that would cap the amount of money Shattenkirk would be required to pay, concluding the evidence supports the trial court’s implied finding that the agreement was unconscionable.
“Arbitration is intended to be a lower cost, efficient alternative to litigation,” the opinion states. “Yet the evidence in this case is the exact opposite.”
AutoNation is represented by Ruth Ann Daniels, William Drabble and Jacob Lewis, attorneys for the Dallas law firm of Gray Reed & McGraw.
Houston attorney Clayton Craighead represents Shattenkirk.
Appeals case No. 14-20-00446-CV