Legal Alert: Texas Supreme Court Permits Expansive Review of Arbitration Awards

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The Texas Supreme Court recently held that parties to an arbitration agreement governed by the state's arbitration act can agree that the arbitrator's decision will be subject to review to the same extent as a court decision would be – that is, appellate review.

In an opinion issued on May 13, 2011, the Texas Supreme Court addressed the question of whether parties may contract for more expansive grounds for review of arbitration awards under the Texas General Arbitration Act (TAA). See Nafta Traders, Inc. v. Quinn.

The case arose out of an arbitration between Nafta's former VP of Operations, who was terminated in a RIF and subsequently sued for sex discrimination under the Texas Commission for Human Rights Act (TCHRA). Nafta moved to compel arbitration based on an arbitration agreement in its employee handbook. The arbitration agreement did not specify whether state or federal law would apply.

Please see full alert below for more information.

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